How will Trump handle the US debt problem when he takes office? In fact, Trump’s approach is quite clear. Bitcoin replacing the US dollar, borrowing a corpse to resurrect.
Step one, dollarization of the gold-backed currency, leading to significant devaluation, thus the US debt will also depreciate significantly.
Step two, Bitcoin becoming gold-backed, leading to substantial appreciation, so that the Trump administration can use Bitcoin, a newly created asset, to resolve US debt. Because raising interest rates is no longer possible, with US debt reaching a staggering $36 trillion, the debt will become similar to Japan’s situation. Just look at Japan’s interest rate hikes, which are practically negligible; indeed, once the debt is too high, it becomes unmanageable.
What to do? Trump’s idea is simply to abandon the dollar and switch to Bitcoin, changing the pool. As the dealer, Trump has the advantage of being the first to act, seizing the largest share of Bitcoin while everyone else is unaware of this. Others dare to follow the trend, and if they get caught, they get sent to prison; if they can be killed, they will be killed; if they can be washed out, they will be washed out. Just look at the Bitcoin moguls in prison, those who died in accidents, and those who got liquidated; they are everywhere.
Trump knows how to play; replacing the dollar with Bitcoin is a clever move. The problem is, what is the risk? The biggest risk is the collapse of dollar hegemony. If the dollar depreciates in an orderly way, it can still maintain the last bit of dollar hegemony for a while. If the dollar collapses too quickly and uncontrollably, it will be like a stampede in a burning cinema; countries and individuals holding dollar assets will suffer greatly.
To address this situation, Trump has taken a third step; nominally, he uses the military to clear illegal immigrants, but in reality, he uses the military for internal stability. The real cleanup is of the vested interests in dollar assets. Looking at the path now, the idea is beautiful, but what will be the result? Let’s wait for Trump to take the stage and perform.
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