The US Debt Collapse Everyone Predicts Is Wrong

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Is the US debt about to collapse?

No, but debasement already is. In this episode of Making Billions, I address this question and more about the US debt, gold, and the dollar.

What is the debasement trade, and how is it different from a default?

This week, I, Ryan Miller, break down the interest spiral behind the 39 trillion dollar US debt, now costing over 1 trillion dollars a year in interest, more than the entire defense budget. 

For anyone building an investment mindset, working as a capital strategist, or stepping into private equity leadership, this is the framework for reading fiscal policy as a signal instead of noise.

To measure portfolio risk and protect purchasing power, DOWNLOAD my U.S. Debt Debasement Exposure & Positioning Scorecard. 

[THE HOST]: Ryan Miller is a fund manager, capital strategist, and former CFO turned angel investor in technology and energy. He is the founder of Fund Raise Capital and Aequor Capital Partners, and has mentored over 1,000 fund managers across private equity, private credit, venture capital, real estate, and alternative assets globally.

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Transcript

Ryan Miller

Everyone is waiting for the US debt to collapse. The YouTube thumbnails, the Doom accounts, the guy at the dinner party who just discovered the national debt clock. They're all bracing for the same thing. The crash, the default. The day it all comes tumbling down. Well, I'm here to tell you it's not coming. It's not the way you think, though. What is coming is quieter, slower, and far more dangerous. Because it's already happening. And most people can't see it. It will make a small number of people who understand it significantly wealthier, and it will quietly impoverish everyone who's sitting in the safe assets waiting for a collapse that never arrives. So by the end of this episode, you're gonna know exactly which of those two groups you're in, and you're going to have the tool to prove it all in your own book. 

Ryan Miller

Before we dive in, just a word from our sponsor. When doing deals, we all know that raising capital is the one thing that unlocks everything. That's why I've partnered with Reef Pass Investors that are actively funding deals right now. So if you're a deal syndicator or founder thinking about launching an M&A focused buy and build platform, reach out to Reef Pass Investors at reefpassInvestors.com.  They are one of the best investors in the game that are helping you launch a new long-term holding company. So here's what I want you to do: click the description in the notes and contact them for a discovery call and potentially get an invite to pitch your next M&A deal. Now, let's get back to the show. 

Ryan Miller

Before we dive in, just a quick disclaimer. Nothing in this episode is legal, financial, or tax or investment advice. This is just for entertainment purposes, and you should always check with accredited professionals before making any decision from this show or otherwise. Now, with that said, let's dive in. 

Ryan Miller

So let me say this thing that's going to annoy both camps in this debate. The debt doomers are going to hate me, and the deficits don't matter crowd, is going to hate me too. Good. When both extremes are mad at you, they're usually standing on the truth somewhere. And here it is the United States is not going to collapse under debt. And the debt, absolutely 100%, it matters. Both of those are true at the same time. So here's what doomers get wrong. A country that borrows in its own currency, its own printing press, its own central bank, does not go bankrupt the way, say, a household does or the way Greece did. Greece borrowed in Euros. It couldn't print Euros. So Greece faced a hard default, a real sorry, there's no money moment. The United States borrows in dollars and it can create dollars at will. It never will be forced into that kind of default. It will never send you a letter that says we can't pay. But, and this is the part that deficits don't matter crowd, refuses to look at. That doesn't mean you get paid back in anything worth having. 

Ryan Miller

Because there are two ways to default. There's the honest way, you don't pay, then there's the sneaky way. You pay back every dollar you promise, but each of those dollars is worth a fraction of what it was when you lent it. The first is default, but the second is debasement. And debasement is the entire history of every empire that ever over-levered. Rome clipped its coins. Every reserve currency in history eventually inflated away its obligations, not with a bang, with a slow but deliberate erosion. So the real question is not, will the US collapse? The real answer to that is no. The real question is as the government inflates and represses its way out of $39 trillion of debt, will you be a holder of the assets it needs to confiscate or an owner of the assets it cannot? That's the whole game, my friends. Let me show you the machine underneath it all. Three mechanisms. Then I'll show you how to position. 

Ryan Miller

So everything on this show runs through one single formula. I call it my Fundraise formula. It is capital equals trust times the transaction. Capital is never just the deal, it's the trust that makes the deal possible. And it's multiplied by the mechanics of the transaction itself. And here's why that formula is the key to understanding sovereign debt, because a government bond is nothing but trust. When you buy a 30-year treasury note, you are making a single bet. And that bet is you can trust the U.S. government to pay back in dollars that still hold their value three decades from now. The entire $29 trillion treasury market is built on that one act of trust. You see how that works? And trust, once it starts to erode at the margin, doesn't erode politely. It reprices. Watch where the trust is thinning, not where the headlines are the loudest. And you'll see the whole thing before the crowd ever does. 

Ryan Miller

So mechanism one, the interest spiral. This is the engine. And it just crossed a line that changes everything. So here are the numbers. Because on this show, we deal in numbers, not just vibes. Gross U.S. debt crossed $39 trillion this past March. The country is now borrowing roughly another trillion dollars every five months. And here's the number that should stop you cold in your tracks. The U.S. government is now spending about $88 billion a month, every month, just on interest. That's over a trillion dollars a year, and it now exceeds what the United States spends on its entire military. Just think about that. The defense budget this year is about $892 billion. Interest, it's over a trillion. So for the first time in modern history, America pays more to service its debt than to defend itself. 

Ryan Miller

Now, why does that specific crossover matter so much? Well, it's because the tell for something economists call fiscal dominance. Let me make it real simple. Interest is now the fastest growing line item in the entire federal budget. Currently, about 18 cents of every dollar the government collects in taxes goes straight to paying interest. And Moody's projects that climbs to 30 cents by 2035. That's almost a third of revenue gone before a single soldier is paid, a single road is built, and a single check is cut. And here's the trap the average maturity of the US debt is short, around six years, which means this 39 trillion doesn't just sit at the low interest rates of the last decade. It constantly rolls over. Every month, old bonds that were issued at one or two percent mature. And the government has to reissue them at today's higher rates, north of 4%. So the interest bill doesn't just grow with new borrowing, it grows as existing debt reprices at higher rates. Higher rates mean just higher interest rates, which means bigger deficits, which means more borrowing, which means more supply, which pushes rates even higher still. That's the spiral. That's the loop that feeds itself. 

Ryan Miller

So let me make the math concrete because this is where it stops being abstract. Picture a $2 trillion slice of debt that was issued back when rates were around 1.5%. That slice matters. And as it matures and it has to be reissued at today's yield, call it four or four and a half percent. That is an extra $60 billion in interest on the same debt, just different rates, just on that one slice for producing absolutely nothing new. No new road, no new program, just the cost of standing still. Now, multiply that across trillions of dollars of low coupon debt maturing every single year for the next decade. Now you understand why the congressional budget office projects net interest will average around $1.6 trillion a year over the next decade. And why the debt is on track to grow by another $24 trillion? The deficits don't shrink, they compound. And the cruelest part is that the biggest driver of the deficit becomes the interest on the deficit itself. It's literally a snake eating its own tail. And here's why the escape hatch has to be debasement and not discipline. 

Ryan Miller

To actually close a gap this size with spending cuts or tax increases, you'd need something on the order of the entire military budget in savings every year, forever. And no politician who wants to keep their job is going to campaign on that. Austerity is literally political suicide. No matter how good it may seem for people, politicians won't do it. But default is unthinkable. So then what's the guy to do? The path of least resistance, the one every indebted democracy eventually takes, it's to quietly let inflation run a little hotter than the interest rate and let time and the printing press do the work no politician will do out loud. And when a government hits that loop, it has exactly one escape hatch that doesn't involve political suicide. It can't cut its way out. The math is too big. It can't tax its way out. The math is still too big. It can't grow its way out fast enough. So it does the only thing left. It leans on the central bank to keep interest rates low, below the rate of inflation. So the debt can be inflated away faster than it compounds. You see how that works? So interest rate and inflation rate. You got to watch those two. That's the fiscal dominance. It's the moment the printing press stops serving the economy and starts serving the debt. And once you're in it, debasement isn't a risk, it is the plan. 

Ryan Miller

That brings us to the second mechanism, which I call the buyer's strike. This is the part almost nobody outside of the bond desks understands. And it is the accelerant. So for 30 years, the U.S. enjoyed something magical: a base of buyers for its debt that did not care about the price. Foreign central banks bought treasuries because they needed dollar reserves for trade. The Federal Reserve bought trillions through quantitative easing. Neither of them was buying because it was just a good investment. They were buying for policy reasons. They were price insensitive. And when you have a giant price insensitive buyer standing under your bond market, you can borrow enormous amounts without rates ever spiking. That base is now walking away. Foreign central banks are quietly reducing their share of U.S. treasuries. The Fed has been shrinking its balance sheet, not growing it. And the reason is a moment most investors have already forgotten. See, in 2022, when Russia's roughly $300 billion in foreign reserves got frozen overnight as part of sanctions, that was the shot heard around the central banking world. Every reserve manager on earth reserved the same lesson in a single afternoon. Paper assets you hold in someone else's system can be frozen with a stroke of a pen. Gold in your vault cannot. 

Ryan Miller

So who's left to buy the debt? Price-sensitive buyers, hedge funds, pension funds, households, people who will absolutely buy U.S. treasuries, but only at a price that compensates them for the risk. And that's the entire meaning of a rising term premium. The extra yield investors now demand to hold long-term government debt. That's when buyers will shift from I'll take any price to I need to be paid for this. Those rates structurally rise, which, remember, from mechanism one, makes the interest spiral even worse. And the credit agencies have made it official. See, in May 2025, Moody's stripped the United States of its last triple A rating, cutting it to an AA1. That was the final one. SP downgraded back in 2011, Fitch in 2023, and now Moody's. For the first time in history of the country of the United States, it does not hold a top credit rating from a single one of the three major rating agencies. Not one. The risk-free asset is no longer rated risk-free. Let that sink in. Because most institutional mandates are still written as if it is. 

Ryan Miller

That brings us to mechanism number three. And this is the one that ends the debate because it's not a theory, it's a trade that's already happening at massive scale. If debasement were coming, who would know first? Not retail, not the Doom accounts. The people who would know first are the exact people running the world's central banks. It's the ones who can see the fiscal math from the inside, who hold the reserves, who understand better than anyone what a currency is worth when its issuer owes $39 trillion. So watch what they do, not what they say. And here's what they're doing. Central banks bought more than $1,100 tons of gold last year. That's the third year in a row above a thousand tons. To put that in perspective, the average for the decade before 2022 was four to five hundred tons a year. They have more than doubled their pace of buying the one asset that has no counterparty, no issuer, and no printing press behind it. 

Ryan Miller

In the World Gold Council survey, 95% of central banks said they expect gold holdings to keep rising. Not one, not a single one expected a decline. And it's not random countries. It's the BRICS bloc and the emerging powers like China, India, Turkey, Poland, Kazakhstan, Brazil, you get it. The BRICS nations now hold over 17% of the world's official gold reserves from around 11% in 2019. The dollar share of global reserves is quietly failing. Gold share is quietly rising. This de-dollarization, and it is not a slogan on a podcast. It is a measurable tons in the vault reallocation by most sophisticated holders of capital on the planet. 

Ryan Miller

Now, let's put these three together. An interest spiral that forces the government toward inflating its way out, a buyer-base shifting from price insensitivity to price sensitivity, pushing rates and the term premium way up. And the smartest money on earth already fleeing paper for hard assets at record pace. That's not a collapse, but that is a debasement. Slow, deliberate, and already underway. And the only question left is which side of this is your capital on? Now let me walk you through how this actually unfolds because if you can see the sequence, you can position ahead of it. And I want to be clear. I'm not giving you a date. Anyone who gives you a date is selling you something that I'm not doing here. I'm giving you the order of operations because debasement, like manias, tend to run in the same pattern. It does not start with a crash, it starts with a higher for longer, becoming permanent. Rates that everyone assumed would fall back to the old normal, they just simply don't. Because the term premium is structurally higher now. The price-sensitive buyers won't lend cheaply to a borrower. So the cost of money stays elevated and the interest line keeps climbing. That's stage one. And we're already living it. 

Ryan Miller

Now, stage two is the squeeze. As interest eats a bigger and bigger share of the budget, the political pressure to get rates down becomes unbearable. Not because the economy needs it, but because the government's own interest bill, that's what needs it. This is the moment fiscal policy starts quietly dictating monetary policy. You'll hear it in the language. Pressure on the central bank, arguments for why inflation targets should be flexible, sudden interest in keeping the government's borrowing costs sustainable. Watch for it. Listen for it. It's the sound of fiscal dominance arriving.

Ryan Miller

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Ryan Miller

And then there's stage three, financial repression. And this is the one that reaches its dirty little hands into your portfolio directly. The government's cleanest tool is to engineer a world where nominal rates just sit below the rate of inflation for years at a time. Negative real rates. Sounds technical, but the effect is brutally simple. Every holder of cash in government bonds loses purchasing power slowly, continuously, and by design. And that lost purchasing power is exactly what erodes the real value of the government's debt. You're being taxed quietly, without a vote. And it's often paired with rules, regulatory nudges that push banks, pensions, and insurers to hold more government debt for safety, creating captive demand right when the government needs buyers the most. That's not conspiracy. That's the standard historical playbook. And it's how U.S. and Britain work down their World War II debt loads. 

Ryan Miller

And stage four is the repricing of everything real. As the market internalizes that, real rates will stay negative. Capital floods towards the assets that can't be printed. Hard assets, real cash flows, monetary metals. That's the gold move the central banks are already front-running on you. By the time it's obvious to everyone, the best entry is a long gone. The window to position is right now, in the quiet, before the repression is even announced. Because it never gets announced. It just happens. But you and I will know better. So this is where I split from every fear-mongering channel on the internet. They say, buy gold and canned food. The end is near. I'm not quite there with the sandwich boards on Park Avenue, but we're starting to feel the shift happening. But guess what? That's not analysis. That's a costume. Fund managers don't get paid to panic. We get paid to position. 

Ryan Miller

So here's the framework: four moves. Educational, not advice, not a primus of any outcome. But this is how an allocator thinks about debasement regimes. Move one. Understand who gets confiscated and don't be them. In a debasement, the wealth transfer runs in one direction from lenders to borrowers. The single biggest borrower on earth is the U.S. government. And the lenders are the people holding its elongated fixed rate nominal debt. So when the government represses real rates, keeps interest below inflation, the holder of a 30-year bond yielding 4% while inflation runs 5 or 6% is losing purchasing power every single year. And it's on purpose and it's by design. That's the confiscation. So the first move is simply awareness. Long duration nominal government bonds are not the risk-free assets in this type of regime. They are the asset most efficiently targeted for slow confiscation. So know how much of that you're actually holding. 

Ryan Miller

That brings us to move two. Shorten and float. If you have to own government paper for liquidity, for mandate reasons, favor the short end and floating rate exposure over the long fixed duration. Short-dated bills reprice with rates. So you're not locked in while inflation erodes you. And inflation linked instruments where the principal adjusts shifts some of the debasement risk off of your back and onto the issuer. The principal, in a regime where the plan is to inflate, you want your cash flows to reset with inflation, not to be frozen underneath it. 

Ryan Miller

Then there's move three. This is the alternative assets play. This is my world and yours. Only assets the printing presses cannot create. This is the debasement barbell. On one side, real assets with pricing power and inflation-linked cash flows, infrastructure, energy, real estate, with genuine rent setting ability, farmland, and the physical layer of the economy. When the currency loses value, the price of the real thing rises with it. And if the asset also throws off cash flow, that resets regulated infrastructure, inflation index leases, you get paid to wait. On the other side, the monetary hedges, gold, and for those with risk tolerance and the mandate, a measured allocation to hard scarcity digital assets, gold has a well-documented inverse relationship to real interest rates. So what does this mean? Well, when real yields fall, which is exactly what financial repression engineers, gold tends to rise. You're not buying gold because the world is ending. You're buying it because it's the asset the central banks themselves are buying for the exact reason they're buying it. So let me be specific about what real assets actually means here. Because it's not all the same. The prize is real assets with two properties at once scarcity, the government can't manufacture, and cash flows that reset with inflation. Regulated infrastructure, power, water, transmission, toll roads, that often has rate structures that adjust with inflation, which means the currency can fall and your income rises to meet it. Real estate is only a debasement hedge if it has genuine pricing power. A building with long, flat leases and no ability to raise rents is just a levered bond in disguise. And it gets confiscated in the exact same way. Farmland and energy reserves are scarce by nature. The discipline is to ask of every real asset. Does its cash flow reset when dollars fail? Or is it frozen? See, frozen cash flow in a debasement is not protection. It's a slow bleed wearing the costume of safety. And a word on sizing and timing, because this is where discipline separates the professionals from the doom buyers, or as I like to say, the fund titans from the fund tourists. This is not sell everything and hide in gold. That's not positioning. That's a panic attack with a thesis attached. The movie is a deliberate tilt, enough real asset and monetary hedge exposure that a decade of negative real rates can't quietly gut your LPs. Well, you keep real productive exposure to the economy, so you're not betting everything on a catastrophe. And you build it in the quiet, not in panic. And the worst time to reach for these hedges is the day the repression is finally obvious to everyone, because then the price already reflects it. You want to be early and boring, not late and desperate. 

Ryan Miller

Then there's move four, and this closes the loop back into your fund. In private markets, floating rate private credit with real covenants and collateral is debasement aware structure. You lend at rates that reset, secured by real assets with protections that don't evaporate once the currency does. And this is your capital raising edge. And I want you to hear me. Your LPs, the family offices, the pension funds, the endowments, they are starting at the same fiscal math you are. They are desperate for managers who can protect real purchasing power, not just nominal returns. The manager who can articulate a coherent, rigorous debasement thesis and offer real asset inflation aware exposure is the manager who raised capital in this environment. That's the Fundraise Formula in action. Capital equals trust times a transaction. In a debasement, the trust that raises your next fund is the trust that you understand what's happening to the money itself. And you've built the vehicle to protect against it. 

Ryan Miller

Now let me do what the Doom channels never do, steel man the other side. Because if you can't argue against your own thesis, do you really own it? And an allocator has to hold both. The strongest case against everything I said just goes like  this. One, the U.S. has the deepest, most liquid capital markets in human history. And there is still no real alternative to the dollar. Europe has its own debt problems. China has capital controls and a closed system. Gold doesn't pay a yield and can't run a global economy. So the de-dollarization trend, while it is real, is happening at the margin, a few percent of reserves, not a wholesale abandonment. Then there's two, the U.S. has been about to collapse under its debt every decade since the 80s. And the people who bet on that collapse have been run over again and again while U.S. assets outperformed the entire world. Being early on this has cost people fortunes. And then there's three. American productivity and innovation are genuinely exceptional around the world. If AI and energy drive a real productivity boom, the U.S. could grow its way into a much more manageable debt to GDP ratio without any dramatic debasement at all. That's not a fantasy. It's happened before, after World War II. Those are real arguments. And I respect them. 

Ryan Miller

Here's why they don't change the move. Notice that none of them require me to be right about a collapse. Because I'm not predicting every one. Even in the optimistic case where the dollar stays dominant and growth is strong, the most likely path still runs through a period of real rates held below inflation. That's a problem. And it needs to manage its interest burden. That's still debasement, just gentler. The barbell I described doesn't require the apocalypse to work. It requires only that the government does what every overindebted sovereign nation in history has done. Protect itself at the expense of lenders. So you don't have to bet that the house is on fire. You just have to stop being the person standing in the most flammable room. 

Ryan Miller

So let's go back to the beginning. Is the U.S. debt collapse here? No, I don't think so. And that's exactly why most people will get this wrong. They're watching for a fire alarm that will never ring. While the thing that actually matters, the slow, deliberate erosion of what a dollar is worth, is already underway in plain sight, measured in tons of gold, leaving the paper system and billions a month in interest, the government can only pay by debasing the very currency it's paying in. I learned to respect this kind of slow risk the hard way, long before I ran any dollar of anyone else's money. When you've been at the bottom, when you've had nothing and clawed your way up, you develop a very specific instinct. You stop trusting things that are only safe because everyone agrees they're safe. The most dangerous risk isn't the one screaming in the headlines. It's the quiet one everyone has decided to ignore. Long outdated government bonds feel safe precisely because a generation was taught they're risk-free. That's the comfort and that is the trap. Respecting the quiet risk, that's the whole edge. So the fund tourists are waiting for the collapse. The allocators are positioning for debasement. They're not confusing safe with familiar. They're separating the assets that get confiscated from the assets that cannot be printed. They're keeping their cash flows resetting with inflation instead of frozen underneath it. And they're building funds that protect real purchasing power for their investors because that is the single most valuable thing a fund manager can offer in an age of debasement. And it's the thing that raises for the next fund. The next decade is going to transfer an enormous amount of wealth quietly, legally invisible, from the people who held the government's paper to the people who held real things, real assets. That transfer is already loaded into the machine I just walked you through. The only thing left undecided is which side of it are you on. And you decide that right now. While it's calm. Not later, when everybody finally notices. And understand the stakes for your fund specifically. And a fund manager who sleepwalks through the next 10 years holding safe nominal paper doesn't blow up in a dramatic headline way. They just quietly underdeliver real returns year after year until their LPs look up and realize their purchasing power went backward. Well the statement said they made money. That is the silent killer of fund manager franchises in the age of debasement. The manager who saw it coming, who built the real asset thesis and protected purchasing power, is the one who keeps the capital and raises for their next fund. Nobody positions after the move. They only get to react to it. 

Ryan Miller

Now, if you want to go deeper than a podcast can, if you actually want to measure this on your own book, I built you a tool. I call  it The U.S. Debt Debasement Exposure & Positioning Scorecard. You plug in your duration, your nominal bond exposure, your real asset allocation, your floating rate mix, and it scores exactly how exposed you are by the confiscation, how ready you are for the debasement, and which of the four tiers you're in, from bondholder all the way up to hard money allocator. And it's free. The link, it's in the notes. And if you're a fund manager who wants to build these frameworks, the network, and the infrastructure to position capital at the highest level through exactly this kind of regime, that's what we do inside of my community called Fund Raise Capital. It's where the thinking on this show becomes the capital in your fund. And I'd love to have you in the room. Download the scorecard, run your book, find out which side of the debasement you're on before the market decides it for you. You do these things, and you too will be well on your way in your pursuit  of Making Billions.