Alden Sees US Insolvency Leading to Debasement and Bitcoin Benefits

Macro analyst Lyn Alden recently told the What Bitcoin Did podcast that the US government's financial obligations are unsustainable in the long term. She argues that the current fiscal trajectory is leading to debasement, making Bitcoin a logical place for investors to park their capital.

Alden points out that the US government's bondholders expect to be repaid in real terms, but the math suggests that this is impossible. She notes that there are three possible outcomes: currency debasement, entitlement restructuring, or defense spending cuts. However, she believes that currency debasement is the most likely path.

Alden also criticizes the Federal Reserve's ability to address the issue, stating that its tools only slow borrowing and do not shrink government deficits. She notes that rate hikes have no effect on shrinking the deficit and that the Fed's actions are a form of 'soft financial repression'.