The Fire We Escaped, the Ice We Chose

A slow motion suicide

I don’t write about politics in this newsletter. That’s not my game. But I do write about political economy — because it’s the only way to make sense of what’s coming.

What is Political Economy?

Political economy sits at the intersection of power and capital. It’s the study of how economic outcomes are shaped by political structures, and vice versa. In most of the developed world — especially the UK and Europe — political economy is a well-developed field of study, complete with journals, university departments, and centuries of scholarship. Here in the U.S., we like our categories neat. Politics goes to the poli-sci department. Economics to the econ department. And rarely the twain shall meet.

But the real world doesn’t care about your academic silos. You cannot understand fiscal policy without understanding elections. You cannot grasp trade dynamics without understanding alliances, sanctions, and strategic interests. And you certainly cannot evaluate a bond market that is propped up by illusion and inertia without grappling with the political reality that no one has the will to stop it.

So this isn’t about Right or Left. This is about trajectory. And that trajectory has now become painfully, obviously clear.a

The Common Knowledge Shift

The House passed the so-called Big Beautiful Bill. Elon Musk wandered off the DOGE reservation. Alone, these are side notes. Together, they crystallized a Common Knowledge moment — the instant when everyone knows that everyone knows.

And what do they know?

That the U.S. federal deficit will not be controlled, much less reversed, during Trump’s second term.

More to the point: if it doesn’t happen now, it won’t ever happen.

Trump represents the last conceivable convergence of public will, political capital, and rhetorical force strong enough to even suggest fiscal constraint. And even he won’t do it. We’ll kick the can. Again. And again. And again. $2 to $4 trillion a year. Structural deficits for as far as the eye can see.

The Inevitable Math

At some point—and that point is approaching fast—the cost of servicing the national debt becomes the single largest line item in the federal budget. Bigger than Defense. Bigger than Social Security. Bigger than Medicare.

And when that happens, something breaks.

Because no one buys 30-year debt from a government whose interest payments consume its future. Not willingly. Not without a spread so large it defeats the purpose. Which means U.S. debt is no longer the safest investment in the world.

That title doesn’t get revoked in a day. But once it’s questioned, it’s lost forever, and throughout history has never been recovered.

And when U.S. Treasurys are no longer considered risk-free, the dominoes start to fall. Pension funds. Foreign reserves. Sovereign portfolios. All the capital structures built atop the fiction of permanence begin to wobble.

This is not hyperbole. This is arithmetic.

What Happens Next?

The dollar’s role as the global reserve currency doesn’t vanish overnight. It erodes. It degrades. It’s replaced at the margin. A little more gold in that portfolio. A few more baskets of commodities. A wider array of bilateral swaps that bypass SWIFT and ignore the Fed. Crypto (oh, now you get it?) And eventually, a shift so slow and quiet that we only recognize it after it’s happened.

Not fire. Ice.

We won’t see collapse. We’ll see disinterest. We’ll see ambivalence. We’ll see alternatives. A world that stops needing dollars. Stops fearing the Fed. Stops pretending Washington matters more than Dubai or Singapore or São Paulo.

And while we’re still playing our internal game — arguing over tax cuts, University research studies, student loans — the world moves on.

What’s Left for You?

You are not powerless. But you are on your own.

This is the time to stop chasing headlines and start building moats. Real cash flow. Real skills. Real networks. Geographic resilience. Hard assets that don’t blink when the CPI print comes in hot.

And above all, the willingness to face the truth without flinching.

Because here it is: we’re not going to fix it. Not now. Not ever.

We are entering a new era of history where there is no longer a world economic hegemon.

We’re going to pretend. We’re going to stall. And we’re going to drift into a long, slow, status quo collapse that will punish the naive and reward the prepared.

Plant your flag accordingly.