Yesterday, I laid out a disturbing possibility: Washington might have found a way to use crypto to make a big chunk of America’s $40 trillion debt disappear.
And guess who gets stuck with the bill?
Here’s how it would work… (And remember: Washington already has the architecture in place to make this happen, thanks to the GENIUS Act passed by Congress.)
Washington creates a stablecoin (I’ve called it EagleCoin), and moves Treasury debt onto a government-controlled blockchain (EagleChain), and forces bondholders to use that blockchain and to take a haircut in the process. A 25% haircut would wipe $10 trillion off Uncle Sam’s books.
Foreign investors flee. The dollar sinks.
And just like that… The Trump administration gets the weaker dollar it’s been angling for.
But that leaves one enormous question unanswered: If foreign investors abandon US debt, who’s going to finance Washington’s spending?
That’s where this scheme gets really interesting.
And where you and I could get royally screwed.
Foreigners fleeing American debt sounds like a disaster for Washington.
It isn’t… Because—here’s what Uncle Sam can do now that he has his own blockchain and stablecoin…
Medicare on the Blockchain?
Uncle Sam can make sure that every dollar that moves between Washington and the rest of us moves in EagleCoin.
That’s roughly $12 trillion a year: Social Security checks, Medicare payments to doctors, hospitals and pharmacies, payroll taxes, income and business taxes, royalties, government contracts.
At any moment, trillions of dollars would be parked in EagleCoin, which is backed by Treasury Debt that, by law, pays 0%. Better still, the loan never comes due because somebody always has to hold the coins. It’s just constant, 24/7/365 funding at zero cost.
The Fed can raise rates, cut them, leave them alone. Doesn’t matter. EagleCoin pays you zero. And the bond market can scream and pout and throw a tantrum, but what can it do?
So, there you have it: A default through a crypto back door sinks the dollar. That’s Miran’s weak dollar.
And a consumer who has no choice but to accept EagleCoin keeps Washington’s borrowing costs near 0%.
Miran no longer needs the world to want Treasuries because Bessent has a buyer who can’t say no.
Washington Has Pulled This Trick Before
If all of this sounds far-fetched, well, just remember the pieces are in place—the GENIUS Act and Stephen Miran’s guide to shrinking a currency to save a country.
Moreover, America has history here.
1933: Americans were ordered to hand their gold to Washington at $20.67 an ounce. Ten months later, Washington repriced it at $35 and kept the difference… meaning that to save a government in crisis, DC soaked its own citizens.
And in 1971: Nixon cut the dollar loose from gold. The dollar slid against the world’s currencies and fanned an inflation that was already heating up. By the time that ’70s show was over, a dollar from 1971 bought only about 50 cents’ worth of goods.
To save a government in crisis again, DC soaked its own citizens. Again.
Washington has to save the ship… and somebody has to be the sacrifice.
Not signed up to Jeff’s Field Notes?
Sign up for FREE by entering your email in the box below and you’ll get his latest insights and analysis delivered direct to your inbox every day (you can unsubscribe at any time). Plus, when you sign up now, you’ll receive a FREE report and bonus video on how to get a second passport. Simply enter your email below to get started.
