Main to remember::
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President Trump, a major bill, could add more than 2.4 billions of dollars to American debt, accelerating an imminent debt crisis and advanced inflation.
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Inflation and devaluation of the dollar remain the path of the slightest resistance in the American economy, eroding the real value of cash and obligations.
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Bitcoin can offer coverage, but only if it is held in Auto-Custistody, as childcare platforms may not survive a long phase of financial repression.
“The devaluations generally occur quite suddenly during the debt attacks.” This quote from Ray Dalio’s book, “The Changing World Order”, strikes stronger today than when the Millionaire Health Funds managed for the first time in 2021. And for a good reason: the United States can enter directly into one.
The US budget deficit exceeded 6 dollars billions in 2024, and Elon Musk, the former head of the Government Ministry (DOGE), saw his efforts to reduce the failure of federal spending, with only $ 180 billion cut out of the 2 dollars he had promised. Interest rates remain at 4.5%because the federal reserve is concerned about the impact of the trade war on inflation. Currently, the yield on the 10-year treasure still oscillates above 4.35%.
Let’s be honest: the American debt spiral is deepened. In addition, its catalyst probably adopted the room on May 22 and is now pending in the Senate.
The great beautiful bill will cause higher inflation
The Big Beautiful Bill has been doing the headlines and breaks the bromances of celebrities since early May. To more than 1,100 pages, the bill brings together the greatest successes of GOP’s past policies: prolonged tax reductions in the 2017 era, the elimination of green energy incentives from former Biden President and closer admissibility to the advantages of Medicaid and Snap. It also authorizes a major expansion of the application of immigration and increases the debt ceiling by 5 billions of dollars.
According to the non -partisan Congress budget office (CBO), the bill would reduce federal revenues by $ 3.67 billions over a decade while reducing expenses by only $ 1.25 billion. This is a net addition of 2.4 billions of dollars with a breathtaking heap already in a breathtaking of almost 37 billions of dollars. Another non -partisan forecastist, the responsible federal budget committee, added that when taking interest payments into account, the cost of the bill could reach 3 dollars over a decade or to 5 billions of dollars if temporary tax reductions were permanent.
Some supporters of the bill argue that tax reductions would stimulate the economy and “pay for themselves”. However, the experience of tax reductions of 2017 showed that even by including positive economic effects, they had increased the federal deficit by almost 1.9 dollars over a decade, according to the CBO.
The figures count, but what takes place is greater than a Billion here or there. As republican senator Ron Johnson of Wisconsin said,
“The CBO score is a distraction. You argue twigs and leave when you ignore the forest on fire.”
The spiral of budgetary deficits and debt has already sucked the American economy, and there is no credible plan to reverse it.
The United States cannot “get out” of the debt
Some maintain that the United States “will grow as if by magic” of this problem. But as Sina, co-founder of 21st Capital, note on x,
“To get out of this debt without reducing expenses or tax increase, the United States would need real GDP growth of 20% + per year for a decade.”
With the first quarter of 2025 recording -0.3% of real GDP growth and the American federal reserve estimate The growth of T2 2025 to 3.8%, such a scenario remains unrealistic.
As the Economist of Harvard Kenneth Rogoff wrote In the Financial Times, deficits should exceed 7% of GDP for the rest of Trump’s mandate, and it is without black swan event.
This means that the only possible growth is now nominal.
In his book, Ray Dalio described the four tools that governments have in a debt crisis: austerity, failures, redistribution and printing. The first three are painful and politically expensive. The fourth, printing and devaluation, is by far the most likely. It is silent, opaque and easily disguised as stimulus. It also eliminates savers, bond holders and anyone dependent on the Fiat. Dalio writes,
“Most people do not pay attention to their risk of money. Most care about whether their assets increase or decrease in value; They rarely worry if their currency rises or drops. ”
In relation: Older investors risk everything for a retirement funded by Crypto
Not your keys, not your parts
This is where Bitcoin enters the image – not as a speculative trade, but as a monetary insurance policy against the American debt crisis.
If, or when, the United States chooses to move from its debt, the treasure and the nominal species will see their real value eroding. Interest rates artificially removed and purchases of obligations forced by institutions could still lead to real yields in a negative territory.
Bitcoin is designed for Resist this result. With its fixed supply and independence from the monetary policy of the government, it offers what Fiat cannot: a refuge for financial repression and the discharge of currencies. Not to mention a return which can shame the obligations. As analysts were noteBitcoin rarity and resilience, the position, to benefit from budgetary instability.
However, all Bitcoin exhibitions are not equal. In a crisis scenario, when the government can justify financial repression in the name of “economic stability”, the risks of guard are high. FNBs and any other daycare service may just not honor the buyouts. The only real protection comes from self-care, cold storage, private keys and total control.
Rogoff said it clearly:
“American fiscal policy is being executed, and there seems to be little political will in one or the other party to repair it until a major crisis occurs.”
Until now, the Congress controlled by the Republicans has not rejected a single Trump proposal, which makes the chances that the major bill project becoming a high right. The same goes for the probability of a full debt crisis. In this world, hard assets by self-very much count more than ever.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.