Recent aggressive shifts in US economic policy have attracted market attention. To win votes, the US presidential election has gradually evolved into a welfare competition, with policy proposals filled with promises that directly target public pain points: limiting credit card interest rates to 10%, banning institutional purchases of single-family homes, investing $200 billion to lower mortgage rates, and distributing tariff checks to voters. More notably, there is pressure on the Federal Reserve to cut interest rates to 1% by 2026—this implies attempting to stimulate the economy through extremely loose liquidity, completely disregarding fundamental economic logic.

This pattern is not unfamiliar. Politicians in developing countries throughout history have followed a similar path: for short-term electoral gains, ignoring fiscal health, relying on money printing and expanding welfare to please voters. The result? Excessive money supply, fiscal imbalance, hyperinflation, and long-term economic stagnation. Argentina fell into an inflationary quagmire due to excessive fiscal expansion, and Venezuela’s high welfare policies led to economic collapse—these are well-known lessons.

Currently, the US is repeating this story. Federal debt as a percentage of GDP has surpassed 130%, with interest payments alone exceeding $1.1 trillion annually, accounting for 15% of federal expenditures. With such heavy debt, the government still plans to spend $700 billion on tariffs and welfare—how will the gap be filled? The only option is to continue issuing government bonds. This creates a vicious cycle: issuing bonds to cover the gap → debt expansion → further bond issuance.

What does this mean for the crypto world? It indicates that the Federal Reserve is forced to keep interest rates low, leading to persistent liquidity flooding. In the short term, this can support asset prices, but long-term inflation pressures and debt crisis risks will not disappear—only delayed. The market should be prepared for potential volatility resulting from this policy shift.