Let me cut through the financial fairy tales you’re being fed.
In 2025, the US government is staring down the barrel of an $11 trillion debt bomb — $9 trillion in maturing Treasury bonds and another $1.9 trillion in deficit spending just to keep the machine humming. That’s nearly half of the entire U.S. economy, due this year.
If that sounds sustainable to you, you’re either delusional, sedated, or employed by a central bank.
We’re not in a recession.
We’re not heading for a soft landing.
We’re in the opening chapters of a sovereign death spiral — and the choices from here are all varieties of collapse.
The Fork in the Abyss
There are only three directions this can go — and a mythical fourth that economists whisper about like medieval alchemists trying to turn lead into gold. Let’s unpack them without the usual fluff.
🔥 Option 1: Do Nothing
Let the free market set bond yields. Issue trillions in new debt at whatever interest rate the market demands. Hope someone shows up to buy.
Spoiler: They won’t. Japan and China are already dumping Treasurys.
The Fed would be sitting on the sidelines watching the entire US debt structure implode under its own weight.
Game over. Default. Treasury auctions fail. Government shuts down. The full faith and credit of the United States gets flushed down the drain.
⚔️ Option 2: Tighten Further
Raise or maintain rates to restore discipline, they say. Crush inflation, they say.
Great — but that ship set sail about 5 years ago. Now, tightening is just accelerated collapse. Higher interest rates mean higher debt service, which means more borrowing, which leads to higher rates, which means… you get the picture.
You get the crash sooner, maybe faster recovery later — but politically and socially, this is suicide. No Fed chair or politician has the spine to pull this trigger until it’s already too late.
🍭 Option 3: Print and Pray (most likely option)
The crowd favourite. Drop rates. Restart QE. Cap Treasury yields. Inflate everything. Feed the markets another sugar hit.
This gives you temporary euphoria followed by structural ruin. You might get 12–18 months of asset price mania — but you’re building a tower of debt on pile of dynamite.
Eventually the bond market revolts, the dollar falls, and inflation comes roaring back with a vengeance. And this time, there will be no more levers to pull and besides, no one will believe they can control it.
🧨 Option 4: The Myth of the Fourth Path
Ah yes — the “Fourth Path.” The economists’ unicorn. The last hope of the polite, Ivy League crowd. The so-called “soft landing” they’ve been speaking about for 3 years’ now.
It goes like this:
- The Fed represses the market and caps yields at 2-3%, keeping demand high for pre-existing Treasurys and killing demand for new ones.
- Congress creates an extra $2 trillion in the budget with major tariffs and tax hikes, extreme wealth taxes, and slashing military and welfare spending.
- Productivity magically explodes, despite constant threat from AI and “net zero” scams.
- Inflation stays within 4-5%.
- Despite getting negative real yields, the world keeps buying Treasurys for some silly reason.
- The dollar remains dominant, somehow, and debt-to-GDP gracefully falls.
Sounds dreamy. But here’s the truth:
Even if every piece of this fantasy fell into place — one Black Swan would blow it all to hell.
And you know how Black Swans work.
They never knock. They kick the door in!
- A geopolitical flare-up (Taiwan, Ukraine, Middle East, or anywhere else US decides to interfere).
- A cyberattack on critical infrastructure.
- A run on banks.
- A commodity super-spike. (Oil prices set to quadruple)
- A currency rebellion by BRICS nations.
- A rogue AI trading algorithm gone feral.
That’s all it takes. One event. One blind spot.
And kaboom — the Fourth Path vaporizes before it even begins.
Let’s be real. This country doesn’t have the political maturity, public will, or institutional discipline to implement anything resembling the Fourth Path. That ship set sail 25 years ago (the last time the country traded solvently).
Are you delusional enough to believe there will be tax hikes on the mega rich and slashing of the military spending in the current administration?
The Psychological Trap
Investors are stuck in the central banker Stockholm Syndrome. They believe the Fed will save them, again and again, no matter the cost.
But here’s the thing:
The Fed is not your friend.
The Treasury is not solvent.
And the system is no longer reformable from within.
The architecture of the American financial empire is being propped up by illusions — not fundamentals.
This is a debt pyramid on fire, managed by technocrats who are too scared to pull the fire alarm, so they are just letting it burn.
“They’ll never let that happen!” is the most common answer I get when speaking with fund managers and economists.
Whoever “they” are, are powerless to do anything about it, unless they can re-write the laws of arithmetic or go back in time.
What Happens Next?
We’ve seen plenty of share market collapses, but never a US Treasury collapse.
If you want a forecast, here it is:
- The Fed will quietly restart QE under another name.
- Treasury auctions will be covertly backstopped.
- Real yields will go negative.
- Inflation will be tolerated, then celebrated.
- The middle class will be hollowed out.
- And eventually — the dollar itself will be questioned.
This won’t be an overnight collapse. It will be a slow, grinding erosion of trust, purchasing power, and stability.
Like the fall of Rome, you won’t see it all at once — but one day, you’ll look up and realise: It’s gone.
What We Are Doing About It
I’m not in the fear business.
I’m in the survive and thrive business.
If you’re still measuring your portfolio in dollars, you’re already behind. Anything seeking 100% upside will experience 100% of the downside.
Because when the bond market breaks — and it will — everything reprices. And those who are positioned early don’t just survive. They rule.
The “Sandwich” strategy is designed to achieve 70% upside and 20% downside, meaning if shares go up 10%, we make 7%, and if they fall 10%, we lose 2%*. We are not short, or inversely correlated, we are just not correlated at all. We’re playing our own game, on the sidelines, watching the world burn with popcorn in hand!
We are currently holding bonds in the Tuna Salad Wrap (~12%), and I am waiting for some technical indicators to sell them and move into more antifragile assets. As soon as the Fed even mentions interest rate cuts or QE, they’ll soar – for perhaps the last time. That will be the time to kiss the bonds goodbye.
Final Word
I’ll leave you with this:
If you think the US system is too big to fail, you’ve misunderstood both history and hubris.
There is no saviour coming. No magic interest rate. No spreadsheet solution.
There is only truth, preparation, and unapologetic courage.
Chaos awaits.
Prepare accordingly.
*Not guaranteed, although this is what we did achieve amid recent tariff turmoil – which turned out to be a great little test for times to come!