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What will happen when the United States is forced to refinance $15 trillion in debt in one year and cannot afford to raise interest rates? One former hedge fund manager says the math is already broken. To understand why, think back to the last time America fought inflation with such high rates, the late 1970s and early 1980s.
Yes, the 70s, the 80s. But we didn't have a debt problem back then. We didn't have a problem with debt. So we have $13 trillion of debt to refinance next year, debt and interest payments that we have to refinance, and we have to...we have to , essentially, finance it with debt , more debt, refinance it , okay?
And a $2 trillion deficit. So you have $15 trillion that you're going to refinance here. Can you imagine if the Fed raised rates to 15%? Not to 20%, but let's say they raised it to 15% because inflation got out of control. Inflation will rise to 7, 8, 9, 10%. Can you imagine? I mean, $15 trillion? If you raise rates another 5%, that's 7 , or $750 billion, that you're adding to the deficit.
They just can't do it. They can't do it. So, what happens then? Well, man, it's a tough situation. Uh, you have inflation. You are better off owning assets. You are better off owning assets. This is a trap. If rates rise, interest rates explode. If rates stay low, inflation eats away at your savings.
And his answer to this trap is simple: own the assets in this video. Debt math is broken, its purpose for Bitcoin, Wall Street fear holding back the price, and the end of the dollar . The man who speaks is James Lavish . He managed money in the hedge fund world for years , and today he is the managing partner of the Bitcoin Opportunity Fund, a fund that invests only in Bitcoin and Bitcoin companies.
He thinks like a Wall Street risk manager and speaks like someone who has been tracking debt metrics for a long time. So let's check his calculations. According to the Treasury Department, the total national debt of the United States is now about $40.6 trillion . In fiscal year 2026, the government paid about $1.5 trillion in net interest alone on this debt.
This is more than the entire national defense budget. Interest is now one of the largest bills in Washington, second only to Social Security and Medicare . Now let's take his example. Add 5% to the $15 trillion in debt that needs to be refinanced, and you get $750 billion in additional interest every year.
This money also needs to be borrowed. So, the debt grows, the interest rates rise, and the circle turns faster. That's why the Fed is locked down. In the late 70s, the Fed could raise rates to almost 20% because the debt was small. Today, the same move would blow a hole in the budget. So, the likely path is not pain.
This is inflation. And in an inflationary environment, people who hold cash lose and people who hold scarce assets gain, which brings us to the asset he cares about most: Bitcoin. Chapter two, his target price for Bitcoin. Bitcoin is currently trading near 80,800. Its all-time high was 1,026,080, set on October 6, 2025.
This puts it about 36% below its record high. Many people think the cycle is over. Lavish doesn't think so. He means the number and the year. He also has a warning about what's coming after him, and he admits that his old prediction was even higher. The clip begins with the host reacting to a big name on Wall Street saying a quiet part out loud.
Listen to this. He's running it, but he's saying it out loud, which is just wow. Do you understand? Yes. So, excluding black swans, do you think your sights are still set on 4.56 million bitcoins over the next few years? Yeah, I would say we'll peak somewhere around 29, early, uh, mid-29. That's my guess.
I think it would be , you know, my base case would be somewhere around 4 or 500,000. Um, it's gone down. This is down from two years ago when I thought we would hit a million dollars sometime in 2030, 2031, but I think that will be the next cycle. And once we get to 4 or 500,000, um, if that's where we end up, then...
Danny, we're talking big numbers. I mean, you know, 300, it could be 600, who knows? But my base case is around 4 or 500. If we get to that, I think we'll have another regular drop. And this will be a drop of 60-70%. It's not going to be 70 80 90%, but I think it's roughly in line with what we thought , it's probably going to be more than this last option because it's going to be a bigger deviation from the mean upwards .
Um, that means you'll have more downward deflection. Or you'll have a larger number, um, total percentage from peak to trough , because you'll have a typical downward trend . And therefore the percentage from peak to trough will be greater. That makes sense. I'll take three, four, five . I'll take any of these numbers.
They all sound good to me. That sounds great to me. Yes. Well, because ... So, his base case is a maximum of between $400,000 and $500,000 sometime in 2029. At today's price of around 80,800, that would be about five to six times more. A million dollars, he says, is now a story for the next cycle, not this one.
But notice what he added. After this high, he expects another drop of 60-70%. From $500,000, a 70% drop would still leave Bitcoin at around $150,000. That’s the essence of Bitcoin . The growth potential is huge, but the declines are brutal. His reasoning concerns the shape of the cycle. The higher the price rises above its long-term trend, the further it tends to return to it.
A bigger peak means a bigger drop. So if you believe his purpose, you must also believe his warning. Most people only hear the first half. And that's the problem for Wall Street. Chapter 3. Fear of Wall Street. Big money doesn't just ask how an asset can grow. They ask how much he could lose on the worst day in history.
Lavish sat in these rooms. He knows how the fund decides what it is allowed to hold , and he explains why a large Bitcoin position almost never reaches the boss. Watch what he says next. You say, "Okay, my Monte Carlo simulations are where you take your portfolio and run it through past, um, shocks." You say, "Okay, if my portfolio that we have today, if we have something like a long-term capital management shock and it sinks, what is that going to do to my portfolio?" And it goes "boop," and it shows what exactly your portfolio is going to do with it on that, you know, that day, that week, or whatever it is .
Then you do the same thing for the bursting of the tech bubble in 1999, 2001, the collapse of 9/11, 2008, that multi-month, um, collapse, um , great financial crisis, 2020, what happened during the lockdowns, and you can see in these simulations what happens. And so you look at this and say, " Okay, none of this will happen again, okay?" You can do other things.
You can do oil price shocks , you know, you can do all sorts of things, but you just run these simulations and say, “Okay, what can I live with? What can I endure? And what about my investment manager, the CIO , what will he sign here? And if you come in and say, "Okay, here's my portfolio, and you have a 25% allocation to Bitcoin." And he'll look at you, he'll say, "Are you out of your mind ?
This is 55%...This has an annual volume of 55. No, remove this position. Reduce it to 1 or 2%. Or take it off the books. "Inappropriate." Uh, it all depends on what you do. If you're in a hedge fund, and you manage your own balance sheet, and it's yours, and it's your money, so you had it... That number he mentions, 55, is volatility.
This is a measure of how sharply the price fluctuates over the course of a year. For Bitcoin, volatility of 55% means that a typical year can bring changes that would end a career in any other asset class. So, the chief investment officer looks at a 25% Bitcoin position and sees risk, not opportunity.
He's reducing it to 1% or 2%, not because he hates Bitcoin, but because his job is to survive the next 2008. Think about the stress test he described, the tech bubble, 9/11, the financial crisis, the COVID crash. The risk system runs today's portfolio through each of these days. If a single position can wipe out a year's worth of returns on a bad day, the system flags it, and Bitcoin flags it almost every time.
That's why so much money on Wall Street still stays on the sidelines . This is not a problem of faith. This is a rulebook problem, and rulebooks change slowly. But here's the twist. America's largest bank just conducted its own calculations on Bitcoin, and the results surprised many people. Here's what he found in the report.
And so, even though we published that report that I wrote about last week in the newsletter , even though JP Morgan said in that report, " Hey, look, Bitcoin tops our list of expected returns across asset classes over the next 10 years." However, this is associated with some volatility. So you have to understand that.
And so, because of that, even though JP Morgan did some...I wouldn't say Jamie Dimon changed this issue, but he gave the green light to his company and his employees to talk about it and start doing business with it. They didn't include it in their portfolios, their model portfolios that they provide to their high net worth assets and key investors, but they called it something that they thought would do very well over the next 10 years.
Why do they say that? They would say that what we just talked about is causing the base currency to depreciate, and that's a pretty pure, uh, expression of that, and it has much higher volatility than gold , so gold is near the bottom of that list. So, for those listeners who haven't seen this, there's a chart that they posted, and actually, you know what, let me open it up.
It's okay if you skip to this part. So when you look at the list of assets that they have here, again, it's not Jamie turning around and saying, "Oh, go and buy Bitcoin." But it was him, his team of analysts, who said, " Look, we expect Bitcoin to be the best performer in the next 10 years ." Hmm. This is associated with serious volatility of 55%.
He is right about the report. On October 19, 2026, JPMorgan Asset Management published its long-term capital market assumptions. These are the profitability forecasts that its strategists provide to clients for the next 10-15 years . For the first time, Bitcoin had its own line. The base case scenario was a 10% annual return for Bitcoin.
Shares of large US companies rose by 7.5%. Gold rose 5.5%, and Bitcoin's volatility estimate was 55%, more than three times the volatility of large company stocks. So, Wall Street is now saying two things at once . Bitcoin is arguably the best performer of the decade, and it is too dynamic for most portfolios.
It is in this gap that opportunity lies. Chapter four. What is holding back the price? If history is so strong, why does Bitcoin feel stuck? Why is it trading well below its record high while debt continues to rise? Lavish points out something that most people never see. This is not news. This is not regulation.
This happens quietly in the options market every day. Listen to this. However, other things are happening with Bitcoin . You see leverage all over the paper, which just keeps it in that range, I think, at higher liquidity volumes. Which, okay, because, you know, back in 2013, 2014, this thing could move thousands of dollars for a fraction of the money moving it, you know, now you can't move it for $10, you know?
So, but then you have, uh, and you have all these original, you know, investors, original players that are out there, and they can still see that they're selling call options. And when you do that, and you, it, it has the effect of selling stocks, you know, selling bitcoins. Uh, and how does it happen with listeners, how does it happen if they sell call options, who do they sell them to?
Not you and me, they usually sell them to a market maker. So he is his own market maker, which means it's on his account. This means that if he is long on a call option, he must be short on some stock. He must be short on Bitcoin. So , I keep talking about stocks, I think about call options in your typical, you know, hedge fund, but it has to be ...
it has to sell some of the underlying asset against them to be what's called delta-neutral. You know this, we've talked about it before . And that comes out to about 30 to 40% of what they currently have in a long position. So if they're long, um, a million dollars of the underlying asset through these call options, they have to sell three hundred or four hundred thousand dollars worth of Bitcoin to hedge themselves.
And they do it. So that's another factor. So, but once that's figured out, you know, here's the simplified version. Long-term holders sell call options to generate income. The market maker buys these call options. To remain neutral , the market maker must sell them some bitcoins. In his example, a million dollars in call options means $300,000 to $400,000 in bitcoin sold as a hedge.
Spread this across the market and you get consistent selling pressure that keeps the price in a range . The term he uses is delta-neutral. This means that the market maker does not want to bet on direction at all. He only wants to make money on the spread. So every time someone sells him a call option, he sells some bitcoin.
If the price rises, he buys some back. If it falls, he sells even more. As a result, the market constantly pulls towards the middle. In 2013, a small amount of money could move Bitcoin by thousands of dollars. Today, with so much paper and leverage around it, the same money will hardly move it. But he also says that this pressure doesn't last forever.
Once it disappears, the range may be broken. Keep this in mind because the last part of this video explains what can trigger it. Chapter 5, the end of the dollar. Before we get to the money printing press, there is a human side to this story . Young people face the same debts, the same prices, and the same housing market, and many of them are giving up their savings.
Instead, they bet on sports, on prediction markets, on anything that can bring in 10 times more than their money. The host calls this nihilism. Lavish says he understands that. Watch what he says next. You know, and they... He's crazy. Yeah, and they get into trouble, you know? Of course. It's like...it's kind of...it's essentially the same as the broader crypto world, right?
It's like nihilism. So you look at your future, you don't see how you're going to succeed. So, what's the point of saving for tomorrow? Instead, you can place bets and just hope you hit something. Yes, because it's better to take $500 and invest it all than to put $500 in a savings account and earn 4% on it.
You know, like it's not going to get them anywhere. So they think, “Oh, well, if I buy this bet at $10, I can make , you know, 10 times more money on it. I can make $90 from this. So if I buy for $100, I can make a profit, maybe I'll walk away with a thousand. "Yes , I'm going to do that." And yes, it's a complicated matter.
Okay, they invariably walk away with nothing, you know, most of them who make that bet. But on the other hand, a guy who bets $900 to make a hundred , well, he'll make $100 quickly. This is much better than investing $900 and waiting 2 years for the same return. You could wait 2 hours and get the same return if, you know, the game followed you.
Of course, the risk is much higher, you know, but the annual return is also much higher. So it's your business, it just happened , we have a problem with the K-shaped economy right now , and especially the younger demographic, they're being pulled away. So I don't blame them. I don't know what I would be like in college, you know, if I looked down, if I looked down the stairs, the same fairway of options, man, it seems like no matter where you go, you're going to be trapped.
So look at the math he describes . Put $500 in a savings account at 4%, and after 1 full year you will earn about $20. This does not buy the future. So, a young man bets $10, hoping to turn it into $100. Most of these bets lose, but the feeling behind them is real. When money continues to lose value, saving starts to seem like a losing game.
This is what a K-shaped economy looks like. People who own assets move up. People who earn only a salary are falling behind. And this brings us to the main question. When does the money printer turn on again? Lavish says it depends on the size of the shock, and he provides a chart to prove it. Here is his answer.
Your question was about when the money printer turns on? Well, tell me what a recession is. Tell me what a system shock or, uh, system disruption is. If you have a downturn like we had in September 2019 , which was not a market downturn, but it was a shock to the credit markets, that is, a shock to the repo market.
Yes, we talked about this, the repo market shock . Well, a shortage of dollars and, uh, a need for more liquidity. Well, then the Fed steps in and just starts doing quantitative easing , ahem, at a pace that meets the liquidity need, whatever that need is. Hmm, which is not that big. You can see it when you look at the Fed's balance sheet expansion, um, you know ...Man, I'm really in the mood to share, Danny.
So, let me show this so you can see it...Okay. So if you look back at that time, here's the balance sheet expansion when you had the repo crisis in 2019, in September 2019... pretty mild during the repo crisis, then you have COVID. Yes, quite soft, quite soft, quite soft. COVID lockdowns, oh my God, here come the money bazookas.
Completely different. So what is...I have to understand what a shock or a need for liquidity is. If this is a credit crunch, which is plain , plain vanilla, it was serious . Don't get me wrong. They quickly turn around and pump in liquidity. They stopped quantitative easing and started quantitative easing.
But it was a serious situation, but it does n't look like that at all. So, you know, let's put some real numbers on this chart. In September 2019, overnight repo rates increased by 10% in one day . The Fed intervened. Its balance sheet grew from about $3.77 trillion in September to about $4.17 trillion by the end of December.
That's about $400 billion in 3 months. Then COVID started. At the end of February 2020, the Fed's balance sheet was about $4.16 trillion. By June 10, 2020, it was $7.17 trillion . That's $3 trillion in about 15 weeks. These are the same money bazookas he's talking about. Notice what he said about speed in a real emergency.
The Fed didn't wait months for a meeting. She stopped reducing her balance and started buying again almost overnight. This is what the market is really betting on. It's not about whether the printer will return, but when. So, the lesson is simple. A small crisis causes a small reaction. A major crisis leads to a flood.
And with debt so high, the next major crisis may leave the Fed no choice. Which leads to a question that no one in Washington wants to answer. What if the world stops trusting debt itself? Lavish says that even the head of JP Morgan warned that the dollar crown was not guaranteed. And he carries this warning through to the end.
Watch what he says next. Dude, Jamie Dimon said it today . And here's the culmination: The United States is in the enviable position of having the world's reserve currency. Um, but that's not what's required, you know? It's not that we, the United States, are not meant to have that kind of currency power.
And at some point, let's pretend, Danny, that we're going to get an explosion of deficits and debt . And you'll reach $100 trillion much sooner than, you know, 2040. Let's say this happens in the early 2030s. If something happens and there's an explosion , at some point you'll lose confidence in U.S.
securities and you won't want to borrow from the U.S. government anymore because you know that the dollars that come back have a much lower purchasing power than when you borrowed them. And at this point, there is a loss of trust. No currency has existed forever. She simply wasn't there. We are talking about the end of the dollar, at least as we know it today.
And so when you, when you said Larry thinks it's going to happen in the shorter term, you don't know if it's going to be the next 10, 20, 30 years. Is this what you're talking about, the end of the dollar as we know it? I'm talking about the end, yes, the end of the dollar as you know it because of the debt-based system we're in.
What does this mean? I think it's complete chaos, and I don't know , you know, there are many other currencies that would have problems before this. Oh, yes. The Euro is right in the middle. Basically, every other currency, except maybe the Swiss franc. I don't know . Um, because they are not part of the euro.
You know, there will be a struggle for global status, and I don't know how it will end. Maybe there will be, maybe we won't have a global reserve currency anymore at that point. But the reason for this is debt. This is because there is a loss of confidence in debt. If you don't want to hold debt, then you won't hold dollars.
Today, the debt is around $40.6 trillion, and to reach $100 trillion, it needs to grow by about another $60 trillion. It sounds far-fetched, but remember how quickly the Fed added $3 trillion during one crisis? In a real emergency, shortages could explode just as quickly. Its essence is not that the dollar will die tomorrow.
The thing is, no currency lasts forever. And when the end comes, it will begin with a loss of trust in debt. If the world doesn't want to hold debt, it won't want to hold dollars. So, here's the conclusion. The United States cannot raise rates without breaking its own budget. This makes more money printing likely.
Lavish predicts that by 2029, the price of Bitcoin will be around $400,000–$500,000. And JP Morgan now considers him the best player of the next decade . But both warn of fluctuations . If you have Bitcoin, size it up so you can survive a 60–70% drop. And remember about market makers. The price may remain stuck for a long time before moving .
Patience is part of the trade because the math of debt is not improving . With each year of waiting, the bill gets bigger. So the real question is not whether you can afford to own scarce assets. It's about whether you can afford not to own it. Let us know in the comments . Do you agree with his target goal of $500,000, or is he being overly optimistic ?
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