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Crypto Journalist
Anas Hassan
Crypto Journalist
Anas Hassan
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The United States Treasury carried out a debt recovery operation targeting Treasury Inflation-Protected Securities worth up to $500 million, due on November 13, 2025, as part of ongoing efforts to manage the nation’s growing debt crisis.
The move comes amid growing warnings from financial heavyweights such as Ray Dalio about America’s fiscal trajectory, with the government now spending 40% more than it should, while crypto advocates posit digital assets as potential relief mechanisms.
The purchase targets TIPS maturing between February 2040 and February 2055, with primary dealers submitting bids through the Federal Reserve Bank of New York’s FedTrade system.
The operation is positioned as a debt management strategy, as the total debt of the United States approaches $40 trillion, a limit that has sparked an intense debate about sustainable fiscal policy and alternative financial systems.
Dalio warns of “economic heart attack” in three years
Ray Dalio has stepped up his debt crisis warnings, affirming the United States does”an economic heart attack” unless the federal deficit drops from about 6% to 3% of GDP in three years.
The Bridgewater founder outlined a self-reinforcing cycle in which excessive debt during recessions leads countries to print money, devalue their currency, increase inflation, and ultimately generate political extremism as living standards collapse.
“We operate with an expenditure of $7 trillion and an intake of $5 trillion dollars, we spend 40% more than we take in, and this is a chronic problem,” Dalio explained in a recent Fox Business interview.
He compared the accumulation of debt service payments to “plaque in the arteries, squeezing the purchasing power,” warning that the government must sell $12 trillion in debt, including $9 trillion in maturing bonds, $1 trillion in interest payments, and $2 trillion in new loans.
Dalio’s analysis on November 5 also highlighted additional concerns about Federal Reserve policy, suggesting QE measures while cutting interest rates in an emerging bubble represents “stir in a bubble” rather than the historical pattern of “stimulus in a depression.”
With AI stocks already showing bubble characteristics, unemployment near record lows, and inflation above target, he asked if the current monetary easing is turning towards debt monetization.
Consumer debt is reaching breaking point
American households are facing unprecedented financial stress as student loan delinquencies exploded to 14.3% in Q3 2025, the highest level ever recorded, while auto loan delinquencies reached 3% and credit card delinquencies reached 7.1%.
The Letter of Kobeissi reported consumers are “drowning in debt” despite relatively low unemployment rates.
The crisis intensified after student loan relief programs expired, with delinquencies jumping 13.5 percentage points year over year as missed payments reappeared on credit reports.
Mortgage delinquencies climbed to 1.3% transitioning into serious delinquency, the highest in eight years, while vehicle repossessions increased by 1.7 million last year against a record $1.7 trillion in outstanding auto loans.
Financial analysts warn that the wealth gap has reached extremes, with the top 10% of earners accounting for 49.2% of total US spending in Q2 2025, the highest since data collection began in 1989.
The pending payday garnishment for student loan borrowers threatens to divert billions from consumer spending, as nearly 2 million borrowers could see up to 15% of their paychecks seized.
Economists disagree on the consequences of debt
While Dalio’s warnings dominate the headlines, economist Steve Keen challenges the mainstream debt narrative, arguing that governments that control their own currency face fundamentally different constraints than households or companies.
Keen emphasized that banks create money when they lend, making credit an addition to aggregate demand rather than just transfers between savers and borrowers.
President Trump has intensified political debates by announcing a “tariff dividend” of at least $2,000 per American, which could distribute more than $400 billion to about 220 million adults who earn below certain income thresholds.
The announcement was immediate comparisons to 2021 stimulus controls that preceded inflation rising near 10%, with critics questioning the massive handouts while stocks hovered near record highs and total US debt climbed toward $40 trillion.
What Does America’s Debt Crisis Mean for Crypto?
Trump has positioned crypto as tax reliefstating that “it takes a lot of pressure from the dollar”, while Senator Cynthia Lummis Advances Bitcoin Strategic Reserve Legislation, seeing as “only solution” to offset the National Debt.
The administration sees crypto as a viable hedge against the growing national debt.
However, market observers remain divided, with some speculating that the increased stablecoin fire could divert attention Bitcoin accumulation strategies despite the overall positive regulatory sentiment towards digital assets as debt alternatives.
