Key results:

• One enormous stunning account of President Trump can enhance over $ 2.4 trillion of US debt, accelerating the upcoming debt crisis and accelerating inflation.

• Inflation and devaluation of the dollar remain the path of the lowest resistance in the US economy, eroding the actual value of cash and bonds.

• Bitcoin can offer a hedge, but only if it is maintained in self -parallel because the care platforms may not survive the long phase of financial repression.

“Devals usually occur quite suddenly during debt crises.” This quote from the book by Ray Dalio “The Changing World Order” hits today more than when the billionaire Hedging Fund wrote it for the first time in 2021 and for a reason: the US can go straight to one.

The budget deficit in the US exceeded $ 6 trillion in 2024, and Elon Musk, the former head of the Department of Government Efficiency (Doge), saw that his efforts to reduce the federal expenditure of failure, with just $ 180 billion with $ 2 trillion, which he promised. Interest rates remain 4.5%because the federal reserve is worried about the impact of the trade war on inflation. Currently, the profitability for 10-year-old Treasurys is still above 4.35%.

Let’s be truthful: the US debt spiral is deepening. What’s more, his likely catalyst handed over the chamber on May 22 and is now in progress in the Senate.

A great stunning bill will cause higher inflation

The great stunning Bill appears on the first pages of newspapers and breaks celebrity bromias from the beginning of May. On over 1,100 pages, the Act collects the greatest hits from the past of GOP: extended tax reductions from 2017, elimination of the green energy incentives of former President Biden and the stronger qualification of Medicaid and Snap services. It also authorizes a significant expansion of the enforcement of immigration law and raises the debt ceiling by $ 5 trillion.

According to non -party people Congress Budget Office (CBO), the account would reduce federal revenues by USD 3.67 trillion in a decade, while reducing expenses by only USD 1.25 trillion. This is a net addition of $ 2.4 trillion to a stunning pile of debt worth almost $ 37 trillion. Another impartial forecasts, the Committee of the responsible federal budget, added that taking into account the interest payments of the accounting costs may enhance to $ 3 trillion in a decade or to $ 5 trillion, if the fleeting tax reductions were fixed.

Some supporters of the account say that tax reductions stimulate the economy and “pay for themselves”. However, the experience of tax reductions in 2017 showed that even in this positive economic effects increased the federal deficit by almost USD 1.9 trillion during the decade, according to CBO.

The numbers matter, but what is developing is greater than a trillion here or there. As the republican senator Ron Johnson from Wisconsin put it,

“The CBO result is a dispersion of attention. You’re lying to twigs and goes away when you ignore the forest that burns.”

The spiral of deficits and budget debt has already sucked in the US economy and there is no reliable plan to reverse it.

The US cannot “grow” debt

Some say the United States will “grow” from this problem. But as a sina, co -founder of the 21st capital, excellent on x,

“To grow out of this debt without reducing tax expenditure or increases in taxes, the United States would need a real GDP growth by 20%+ annually for a decade.”

With Q1 2025 registration -0.3% of the actual GDP growth and US Federal Reserve appreciating Height Q2 2025 at 3.8%, this scenario remains unreal.

As an economist Harvard Kenneth Rogoff wrote In the Financial Times it is expected that the deficits will exceed 7% of GDP until the end of Trump’s term, and this is without the Black Swan event.

This means that the only possible enhance is nominal.

In his book, Ray Dalio outlined four tools that have the rule of debt: savings, non -performance, redistribution and printing of money. The first three are painful and politically exorbitant. The fourth, print and devaluation is by far the most likely. He is still, unclear and easily disguised as a stimulus. He also poisons saving, bond holders and all those dependent on Fiat. Dalio writes,

“Most people do not pay enough attention to currency risk. Most are worried about whether their assets will increase or down; they rarely worry about whether their currency is growing or down.”

Related: Older investors risk everything at a pension financed by cryptocurrencies

Not your keys, not your coins

At this point, Bitcoin enters the photo – not as a speculative trade, but as a monetary insurance policy against the US debt crisis.

If or when the United States decide to throw away the debt, nominal Treasurys and Cash will see their real Erode value. Artificially suppressed interest rates and forced purchases of bonds by institutions can additionally bring real yields to negative territory.

Bitcoin is designed to resist this result. Thanks to the constant supply and independence from the government’s monetary policy, it offers what Fiat cannot: shelter from financial repression and currency discouragement. Not to mention the performance that can embarrass bonds. As Bitwery analysts noted, Bitcoin deficiency and resistance positions to utilize fiscal instability.

However, not the entire exposure to bitcoin is equal. In a crisis scenario, when the government can justify financial repression in the name of “economic stability”, the risk of care is high. ETF and any other care services may simply not honor redemption. The only true protection comes from your own care, radiator, private keys and full control.

Rogoff is simply:

“American fiscal policy flows from rails and it seems that in each side there is no political will to fix it until a serious crisis occurs.”

Until now, Congress controlled by Republicans has not rejected a single Trump’s proposal, thanks to which the chances that a enormous stunning bill has become high. Similarly, with the probability of a full debt crisis. In this world, difficult assets in self -defense will be more vital than ever.

This article is used for general information purposes and should not be and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are themselves and do not necessarily reflect or represent the views and opinions of Cointelegraph.