The Anatomy of Economic Strain

Step outside this September and there’s a crispness to the morning air, a sense that the season has tilted. The world feels, in subtle and not-so-subtle ways, under stress. Turn on the news: headlines about the record U.S. national debt, fretful retail investors watching stock market swings, families quietly feeling the pinch each time they swipe for groceries or pay a utility bill. The “cost of living” isn’t just a phrase—it’s a mood, a run of calculations, a series of private adjustments. If 2022 was about inflation running hot and erratic, 2024 and 2025 are about something slower, more haunting—a kind of economic fatigue, where the strain lingers even as the statistics suggest relief.

To understand where this strain comes from, and why it matters, one must look beneath the pulse of market tickers and election cycles. Strain has an anatomy—rooted in debt, shadowed by inflation, stretched by market fragility, and deepened by geopolitical and social rifts. Each layer leaves marks, not only on balance sheets but on the lived experience of U.S. households and retirees.

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When Ray Dalio speaks, the financial world listens...

He says the U.S. economy is like a patient with clogged arteries…

And the debt buildup could trigger a market "heart attack.”

At the same time:

– Political violence is flaring.

– Crime is spreading through major cities.

– AI is eliminating jobs at record speed.

It’s chaos...

And only a few assets can survive.

Gold is one of them.

Our Free Gold Guide reveals:

✅ Why gold could keep skyrocketing

✅ What assets usually survive when currencies crash

✅ How everyday Americans can protect retirement accounts today

Don’t ignore this warning.

The system is weaker than it looks.

Debt, economists say, is neither good nor bad in itself. But the U.S. economy has been living with increasingly heavy debt for years—federal, household, and corporate—reaching levels that now make even seasoned policymakers uneasy. In the spring of 2025, the Congressional Budget Office confirmed what markets had long feared: without meaningful policy changes, federal debt is projected to surpass 130% of GDP within the next decade, driven by a mixture of pandemic-era spending, aging demographics, and evolving fiscal policies.

The latest Senate reconciliation bill alone is set to add more than $4 trillion to national debt by 2034, its impact compounding prior commitments. And these bills aren’t occurring in isolation; each new dollar borrowed intersects with higher interest rates, translating to larger debt service costs—money that could otherwise go toward public goods, emergency relief, or economic innovation.

Household and corporate debts also continue to set records. For the average American, mortgage balances remain elevated from the 2020–22 housing craze, while credit card borrowing has surged, now complicated by stubbornly high interest rates (APRs regularly above 20%). Corporate America, too, finds itself facing rising refinancing costs, a shadow over confidence and investment. According to a 2025 IMF outlook, “Fiscal vulnerability in advanced economies requires urgent attention, as the accumulation of debt in both public and private sectors poses a latent risk to economic stability”.

Bridgewater’s Ray Dalio recently commented

It’s not just a matter of numbers. Every uptick in debt service costs, every new budget negotiation, drips anxiety into an economy used to reliable safety nets. As one BIS official put it in a June 2025 report, “Ensuring fiscal positions are sustainable and enhancing macro-financial resilience are now at the core of maintaining stability”.

If the summer of 2023 was peak worry for inflation, the summer of 2025 is about its ghosts. Officially, inflation is down—headline CPI is running at about 2.4%, a far cry from the 9% annualized rates that stunned families and businesses in 2022. Energy prices have settled, and used cars aren’t breaking hearts on dealer lots. But for most households, essential expenses such as housing, food, and utilities still climb, often outpacing raises and consuming a bigger share of income.

Shelter costs, for example, are up 4% year over year. Food prices, while no longer skyrocketing, continue to advance, and utility bills in much of the country remain uncomfortably high (natural gas bills are up nearly 9.4% year-over-year). The “moderation” in inflation is mostly relief by comparison—real wages have just begun to outpace prices (+1.4% this year), yet many are left coping with years of lost purchasing power.

Credit card debt sits at record highs, and interest rates aren’t coming down soon. According to recent analysis, “even now, with U.S. inflation easing to around 2.4% in 2025, its effects are still rippling through households, companies, and the broader economy”. Shrinkflation endures—smaller packages at the same price—and many retirees on fixed incomes have been forced to adjust to a permanently higher cost baseline.

Nouriel Roubini, writing on X this spring, put it sharply: “Long after the inflation headline fades, the damage to middle class savings and retirement dreams lingers. Policy response always trails reality for most households.” This lag, between statistical relief and everyday experience, is the real aftershock.

If debt and inflation are slow-building tremors, market fragility is the sensation of standing on uneven ground. The old anchors no longer hold: correlation between stocks and bonds—that 60/40 portfolio classic—has been tested, sometimes breaking down just when least expected.

Institutions and private investors alike are moving capital in ways that signal doubt about old models. Gold and cash have seen near-record inflows during periods of volatility in 2024–2025, a trend echoed in institutional research. In its 2025 annual review, the Bank for International Settlements flagged “significant volatility in response to frequent, unpredictable trade policy announcements,” and warned, “existing vulnerabilities in the real economy and financial system have the potential to amplify the negative impact of shocks and adverse shifts in policy”.

The International Monetary Fund, in its April global outlook, noted, “Asset allocation strategies must now contend with a world of unstable correlations, where liquidity can vanish quickly, and where traditional diversification offers less protection than before”. Portfolio managers report that the hunt for alternatives—private credit, infrastructure, commodities, inflation-linked bonds—now veers from fashion to necessity.

Debt, inflation, and market turbulence would be challenge enough. But the current period is further shaped by the high amplitude of geopolitical and social conflict. America’s growing entanglement in trade disputes—most recently, a high-stakes confrontation with China and new tariff regimes from the Trump administration—has added fresh volatility to global supply chains and asset markets.

Agustín Carstens, chief of the BIS, said in a recent press release, “The global economy stands at a critical juncture, entering a new phase of increased uncertainty and unpredictability, which is challenging public confidence in institutions, including central banks”. These trade wars often show up as sudden shocks—in the bond market, in the shape of an interrupted supply line in retail stores, or even in the way global funds hedge their positions.

At the same time, the U.S. continues to experience deepening social and political divides. Political polarization has soured debates on fiscal reform, while growing incidents of violence and a noisy election season raise the cost of social cohesion. Meanwhile, the permeation of AI-driven automation is quietly but fundamentally altering labor markets, squeezing some workers while creating anxiety for others about the durability of their careers.

As Dalio has repeatedly suggested in both interviews and his broader commentaries,

When anxiety becomes endemic—when it’s baked into not just policy debates but daily headlines—confidence, the core asset underpinning markets and money, becomes harder to sustain.

For the American saver, retiree, and long-term investor, “strain” isn’t about a looming collapse—it’s the slow grind of adaptation. It means recalculating savings plans, rethinking what’s “enough,” and watching as familiar playbooks lose some of their surety.

The core lesson, drawn both from institutional analysis and lived experience, is vigilance. A world of higher interest rates, persistent fiscal deficits, and fractured market correlations is one where “set and forget” becomes more dangerous. Staying engaged—reviewing portfolios, taking inflation into account in income planning, remaining mindful of new asset classes (and their risks)—matters more than nostalgia for the way things used to work.

A recent Ray Dalio tweet summed up the spirit of the moment: “There are three levers we can pull to bring the deficit down: reducing spending, increasing taxes, and boosting real growth. Achieving any one is hard. Hoping for yesterday’s weather won’t change tomorrow’s forecast.”

A checklist for navigating economic strain in 2025:

It’s worth watching global conversations, not just local ones. Dalio’s widely viewed YouTube interviews, recent IMF and BIS press conferences, and a series of Federal Reserve talks ground these facts in both statistics and lived reality, offering guidance not for escape, but for adaptation.

Key Shifts in America’s Financial Landscape:

Strain is not collapse. If anything, it is warning rather than prophecy—a signal that the systems built since 1945 face new tests, and that resilience now matters more than nostalgic longing for the old rules.

The numbers—rising debt, sticky inflation, market tremors—are the visible effects. But the real test, for policymakers and for the public, is willingness to adapt. To keep faith in the future, not just the past.

As 2025 unfolds, perhaps the most humane, and most practical, position is this: Accept the feeling of strain as a natural response to a world in transition, and use it, quietly, as motivation to stay alert. This moment isn’t about waiting for rescue—it is about learning to navigate, together, the slow and sometimes uncomfortable road of change.

Deniss Slinkins,
Global Financial Journal