How high is the interest on U.S. debt? — For every dollar of tax revenue collected, 23 cents go toward paying interest on past debt! This is why the market is increasingly convinced that the Fed will cut rates in September, and 25bp is just the starting point—it could even go straight to 50bp. Why? Because fiscal capacity has been pushed to its limits: 1. Interest expenses alone have hit an annualized $1.1 trillion, surpassing the entire defense budget; 2. Tax revenues are declining as the economy slows, but debt refinancing costs are accelerating; 3. The average debt maturity is only 5-6 years, meaning a large amount of old debt needs to be rolled over at higher interest rates every year. Under this structure, rate cuts are not just about stimulating the economy—they are an inevitable fiscal move. As the cost of the past grows, the future market will become increasingly financialized: 1⃣ Bond market: Term premiums will reflect fiscal pressures more intensely, leading to greater volatility in long-term rates. 2⃣ Dollar assets: Trust discounts will emerge cyclically, weakening the dollar’s safe-haven appeal. 3⃣ Risk assets: Liquidity cycles will become shorter and more intense, with markets moving in bursts rather than a steady bull run. 4⃣ Crypto assets: $BTC and $ETH will increasingly be seen as hedges against fiscal distress; stablecoins and RWAs (real-world assets) will play an external role in fiscal financial engineering, essentially acting as on-chain distribution channels for U.S. debt. Mark my words, what we’re witnessing might just be the historical moment when the fiat system begins to show its limits!