The US Is ‘Long-Term Insolvent,’ Says Macro Guru

Macro analyst Lyn Alden told the What Bitcoin Did podcast on Tuesday that the US is “long-term insolvent” and debasement is inevitable, making Bitcoin(CRYPTO: BTC) the logical place to park capital.

Alden said that the US government’s obligations are essentially untenable as long as bondholders expect to get paid back in real terms. The math leaves three possible outcomes:

• Currency debasement — the most likely path, already being priced in by the bond market
• Entitlement restructuring — politically difficult but mathematically necessary over time
• Defense spending cuts — possible but unlikely given current geopolitical pressures

She was clear this is not a doom call but a structural read on where the numbers lead over the coming years and decades. 

She argued that the Fed cannot fix the problem either because its tools address lending-driven inflation rather than the fiscal-driven inflation that results from deficits equal to 7% of GDP.

Rate hikes slow borrowing but do nothing to shrink a government deficit.

Why Bessant Looks Just Like Yellen

Alden noted that Bessant spent years criticizing Yellen for leaning too heavily on short-term T-bills instead of issuing more long-end debt. 

Now running the Treasury himself, he is doing the same thing and going further, doubling the buyback program with no liquidity crisis forcing his hand. 

She called it a softer form of financial repression where the administration simply dislikes where yields are and steps in to manage perception rather than fix an actual market problem.

The dynamic, she argued, mirrors what happens in emerging markets when fiscal dominance takes hold. 

Governments start issuing shorter and shorter duration debt because nobody wants to lend long when the fiscal trajectory looks unsustainable. The U.S. is nowhere near hyperinflation, but it is picking up those same characteristics in a lighter form.

Why This Is Bullish for Bitcoin

Alden argued that when large institutional capital managers start concluding that nothing stops this fiscal trajectory, they reduce bond exposure and move toward hard assets. 

Bitcoin sits directly in that path as a fixed-supply asset that neither the Treasury nor the Fed can debase through monetary policy.

She said the fact that policymakers are intervening now, even without a crisis, signals that they have already committed to a long-term path of currency debasement.

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