Elon Musk 1000% certain that America will go bankrupt — a warning to investors about crazy debt and how to shield your nest egg

And there are plenty of reasons to pay attention. Canada’s federal debt crested at just over $1,266.5 billion at the end of fiscal year 2024-25. According to the Montreal Economic Institute, the Carney government is now projecting a deficit of $78.3 billion for 2025-2026, up from $48.3 billion the year before, and that would mark the 10th consecutive year without a balanced federal budget. To put this in perspective, this means that every baby born in Canada now enters the world carrying more than $33,000 in federal debt.

One of the biggest problems with carrying large debt is the interest cost. Analysis from the Montreal Economic Institute shows our nation’s debt costs are projected to rise to $55.6 billion this fiscal year and to $76.1 billion by 2030 — a 37% spike.

Ready to take control of your portfolio? Use our ultimate guide to brokerage accounts to compare account fees, trading tools, and sign-up bonuses for Canada's leading investment platforms.

The slow erosion of your dollar

This isn't just an abstract number problem. When governments borrow beyond their means, the purchasing power of your money quietly shrinks, as well.

According to Statistics Canada's Consumer Price Index (CPI), $100 in 1970 is equivalent in purchasing power to about $813 today. In other words, a dollar now buys roughly 12 cents of a good or service back in 1970.

Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund, has warned repeatedly that we are in the late stages of a major debt cycle — and that the next shock is more likely to come from governments than from Wall Street. At the World Government Summit, Dalio described a scenario in which governments must borrow simply to pay interest — a vicious cycle he calls a "debt death spiral."

His prescription? Diversify. "There won't be a default," he said in remarks about central-bank dynamics. "The central bank will come in, and we'll print the money and buy it. And that's where there's the depreciation of [the value of] money."

Dalio's framework applies to Canada, too. Viewed through his "Big Cycle" lens — which examines how nations rise and decline through patterns of debt expansion, productivity growth and geopolitical pressure — Canada shows late-cycle characteristics: Rising debt, modest productivity growth and growing social tension tied to the housing affordability crisis.

The good news is that savvy investors have ways to protect their wealth, even when government fiscal math stops adding up.

A safe haven worth reconsidering

To insulate investments from the effects of currency erosion and government debt, Dalio has consistently emphasized the value of diversification — and singled out one time-tested asset in particular.

"People don't have, typically, an adequate amount of gold in their portfolio," he said. "When bad times come, gold is a very effective diversifier.”

Gold in Canadian dollars rose more than 57% in 2025 alone, and the precious metal has long served as a store of value. Unlike fiat currency, it can't be printed. Because it isn't tied to any single economy, investors have historically flocked to it during periods of economic turmoil or geopolitical uncertainty.

Other prominent voices see gold’s value in the investment portfolio. JPMorgan chief executive Jamie Dimon recently said gold could "easily" reach US$10,000 (C$14,100) an ounce in the current environment.

Ready to start growing your wealth? Compare Canada’s top-rated investment apps and find the perfect platform for your financial goals.

How to invest in gold

Canadian investors have a few different ways to get exposure to gold and precious metals.

One of the easiest, tax-efficient ways is to add gold exposure by investing in a gold exchange-traded fund (ETF) through a tax-free savings account (TFSA) or a registered retirement savings plan (RRSP). Both registered accounts can hold gold ETFs listed on Canadian stock exchanges — such as the iShares Gold Bullion ETF (TSX: CGL), Purpose Gold Bullion Fund (TSX: KILO) or the Sprott Physical Gold Trust (TSX: PHYS). These ETFs offer liquid, low-cost exposure without the complexities of storing physical metal.

For instance, Wealthsimple lets investors trade shares of gold ETFs — funds that typically hold physical gold in vaults or track the price of gold. The best part is that shares in these funds can be purchased in a TFSA, RRSP, FHSA or in a non-registered account. The funds offer liquid, low-cost exposure without the complexities of storing physical metal.

Another option is to expand into precious metals — rather than focus solely on gold. Examples include Global X Silver Bullion ETF (TSX: HUZ), Sprott Physical Silver Trust (TSX: PSLV) and Global X Gold ETF (TSX: HUG).

Or consider investing in gold mining stocks, where you can buy shares of mining companies, such as Barrick (TSX: ABX), Agnico Eagle Mines (TSX: AEM), Wheaton Precious Metals (TSX: WPM) or Franco-Nevada (TSX: FNV).

But what if you know you should be investing, but don’t want the guesswork of doing it alone? Wealthsimple portfolios offer an easy, hands-off way to grow your money. The pre-built portfolios are tailored to your financial goals, risk tolerance and investment horizon — whether you’re saving for retirement, a home or building long-term wealth.

Expert-managed and designed to weather market ups and downs, Wealthsimple takes care of the heavy lifting: Automatic contributions, dividend reinvesting and smart rebalancing keep your investments on track. Plus, you can invest through RRSPs, TFSAs or non-registered accounts, all from an intuitive online dashboard or their easy-to-use mobile app.

Trusted by more than three million Canadians, Wealthsimple manages over $100 billion in assets and provides $1 million in eligible coverage through the CDIC for chequing accounts and CIPF for investments. Plus, as licensed fiduciaries, Wealthsimple's advisors must put your financial interests first. As a Money.ca reader, get a $25 bonus when you open your first account and fund at least $1 within 30 days. Visit Wealthsimple for up-to-date terms and conditions.

For investors interested in holding physical gold, be sure to work with an approved custodian and purchase bullion that meets the Canada Revenue Agency's (CRA) purity requirements (at least 99.5% pure). For instance, Questrade lets you buy and sell physical precious metals — even holding physical gold inside a self-directed RRSP or TFSA. Open an account today and get $50 cash back, access to award-winning investment tools and pay no trading fees, no account opening fees and no annual fees on RRSP and TFSA accounts.

Don't let high fees eat your returns. Discover which Canadian brokerages offer $0 commission trading and low account minimums to keep more of your money.

Real estate without the landlord headaches

Gold isn't the only asset that has historically held its value during inflationary periods. Real estate has also proven to be a powerful hedge.

When inflation rises, property values often rise with it, reflecting higher costs for materials, labour and land. At the same time, rental income tends to increase, giving landlords a revenue stream that adjusts for inflation.

That said, Canada's real estate picture is nuanced right now. The national average home price sat at $658,300 in January 2026, which is about 22% below the $841,900 peak reached in early 2022. While the market has cooled significantly from its pandemic-era highs, the Canadian Real Estate Association (CREA) forecasts the national average price will rise 2.8% in 2026, reaching $698,881.

When most people think about investing in real estate, they picture massive down payments, midnight plumbing emergencies, and tedious tenant screenings. But diversifying your portfolio with alternative investments doesn’t have to mean taking on a second job as a landlord. Real Estate Investment Trusts (REITs) offer a savvy middle ground, allowing you to capture the income-generating potential of commercial, industrial, and residential properties—completely hands-free. By moving independently from traditional stocks and bonds, REITs provide a practical way to hedge against inflation and add steady distribution yields to your financial blueprint.