Debt Debasement: 4 Proven Moves Every Fund Manager Must Understand Before the Quiet Confiscation Begins

Debt debasement is not a future risk for fund managers — according to Ryan Miller, it is the defining wealth transfer mechanism already operating inside the $39 trillion U.S. fiscal machine right now.

Ryan Miller BSc., MFin. | Host, Making Billions Podcast | LinkedIn

Key Takeaways

• Understand that debt debasement — not outright default — is the historically consistent escape hatch for sovereigns that borrow in their own currency, and that the U.S. is structurally positioned to follow that same path.
• Learn how the interest spiral, the buyer’s strike, and the central bank gold accumulation together form a three-mechanism system that fund managers can use to frame a rigorous debt debasement thesis for LPs.
• Consider how long-duration nominal government bonds function as the assets most efficiently targeted by financial repression during a debt debasement regime, according to Ryan Miller’s analysis in this episode.
• Explore why real assets with inflation-resetting cash flows — infrastructure, farmland, energy reserves — are the structural counterweight to debt debasement across a diversified institutional portfolio.
• Discover why the fund manager who can articulate a coherent debt debasement thesis and offer real asset exposure is, in Ryan Miller’s framework, the manager most likely to attract and retain institutional LP capital over the next decade.

Debt Debasement vs. Collapse — Why the Distinction Defines the Next Decade for Fund Managers

Debt debasement is the central thesis of this Making Billions Podcast episode, and Ryan Miller opens by drawing the sharpest possible line between two outcomes that most investors are conflating. The U.S. is not heading for an outright debt collapse, and understanding why that distinction matters is the first analytical responsibility of any serious allocator. Miller frames this as a failure of imagination on both sides of the debate, the doom camp waiting for a hard default, and the deficits-don’t-matter camp refusing to acknowledge that debasement is a form of default in everything but name.

According to Miller, a country that borrows in its own currency and controls its own central bank cannot be forced into a Greek-style hard default. Greece borrowed in euros it could not print, which produced a genuine “there is no money” moment. The United States borrows in dollars it can create at will, which means the mechanism of debt resolution looks entirely different. Debt debasement replaces the honest default with a slower, quieter process — every dollar promised is paid, but each dollar delivered is worth a fraction of what was originally lent.

Miller cites the full arc of reserve currency history to support this framing, noting that Rome clipped its coins and every major reserve currency in history eventually inflated away its obligations, not with a bang, but with deliberate erosion. The educational framing he offers is this: the real question for fund managers is not whether the U.S. will collapse, but whether their capital is positioned in assets the government needs to confiscate through debt debasement or in assets it simply cannot print. That single question, he argues, is the whole game for allocators operating over the next decade.

Debt Debasement Mechanism One — The Interest Spiral That Has Already Crossed a Critical Threshold

Debt debasement finds its first mechanical engine in what Miller describes as the interest spiral, and he opens this section with a set of figures that frame the structural shift concretely. According to Miller, gross U.S. debt crossed $39 trillion in March, with the country adding roughly another trillion dollars every five months. The figure he identifies as the most significant is the monthly interest cost: approximately $88 billion per month, totaling more than a trillion dollars annually, a number that now exceeds the entire U.S. defense budget of approximately $892 billion.

The significance of that crossover, according to Miller, is what economists call fiscal dominance, the moment interest becomes the fastest-growing line item in the federal budget. He notes that roughly 18 cents of every dollar collected in federal taxes currently goes directly to interest payments, and references Moody’s projections suggesting that figure climbs toward 30 cents by 2035. That trajectory means that before a single government program is funded, nearly a third of revenue is already committed to servicing existing debt, a condition that structurally constrains every other policy decision. For more on fiscal dominance and its historical precedents, the Federal Reserve Bank of St. Louis has published detailed analysis of the concept and its implications for monetary policy independence.

Miller also highlights the structural trap embedded in the average maturity of U.S. debt, which he identifies as approximately six years. That short average maturity means the full $39 trillion does not sit locked in at the low interest rates of the prior decade, it constantly rolls over. As old bonds issued at one to two percent mature and must be reissued at current yields north of four percent, the interest bill grows not only with new borrowing but with the repricing of existing debt. Miller describes this as a self-reinforcing loop: higher rates produce higher interest costs, which produce larger deficits, which require more borrowing, which pushes rates higher still, a debt debasement dynamic that compounds rather than stabilizes.

To make the math concrete, Miller uses a $2 trillion slice of debt issued at approximately 1.5 percent that must be reissued at four to four and a half percent. That repricing alone generates roughly $60 billion in additional annual interest on the same nominal debt, producing nothing new, no infrastructure, no programs, just the cost of standing still. Multiplied across trillions of low-coupon debt maturing every year for the next decade, Miller references the Congressional Budget Office projection that net interest will average approximately $1.6 trillion annually over that period, with total debt on track to grow by another $24 trillion. The debt debasement arithmetic, he argues, makes political escape through austerity or tax increases mathematically implausible, which means the only structurally viable path is inflation-assisted erosion of the real debt burden.

Debt Debasement Mechanism Two — The Buyer’s Strike and the End of Price-Insensitive Demand

Debt debasement accelerates when the base of buyers willing to absorb government paper at any price begins to erode, and Miller identifies this as the mechanism most poorly understood outside of professional bond desks. For approximately three decades, the U.S. treasury market benefited from a structurally unique demand base: foreign central banks buying dollar reserves for trade policy reasons, and the Federal Reserve expanding its balance sheet through quantitative easing. Neither class of buyer was making a return calculation, they were buying for policy purposes, which made them effectively price insensitive and allowed the U.S. to borrow at scale without rates rising to reflect the risk.

That price-insensitive demand base is now contracting, according to Miller. Foreign central banks have been quietly reducing their share of U.S. treasuries, and the Federal Reserve has been shrinking rather than expanding its balance sheet. Miller identifies the 2022 freezing of Russia’s approximately $300 billion in foreign reserves as the catalytic moment, a single afternoon in which every central bank reserve manager on earth absorbed the same lesson: paper assets held inside someone else’s system can be frozen by executive action, while physical gold held in your own vault cannot. That event, in Miller’s analysis, fundamentally repriced the risk calculus of holding dollar-denominated reserves for the world’s central banks. The Bank for International Settlements has documented how reserve manager behavior has shifted in the post-sanctions environment.

The buyers who remain in the treasury market are price-sensitive, hedge funds, pension funds, and households who will purchase U.S. government debt but only at yields that adequately compensate them for duration and inflation risk. Miller describes this as the structural meaning of a rising term premium: the additional yield investors now demand to hold long-term government debt, reflecting the shift from unconditional demand to conditional demand. That shift feeds directly back into mechanism one, higher term premiums mean higher rates, which mean higher interest costs, which deepen the debt debasement spiral. Miller also notes that in May 2025, Moody’s removed the United States’ final triple-A credit rating, cutting it to AA1, meaning the U.S. does not hold a top rating from any of the three major credit agencies, a development that carries implications for the institutional mandates still written as though U.S. treasuries are a risk-free asset.

Debt Debasement Mechanism Three — What Central Banks Are Actually Doing With Their Reserves

Debt debasement, if it were a genuinely foreseeable policy path, would be visible first in the behavior of the institutions with the clearest view of the fiscal math from the inside, the world’s central banks. Miller makes this argument explicitly, and then presents the data on what central banks have actually done. According to Miller, central banks purchased more than 1,100 tons of gold last year, marking the third consecutive year above 1,000 tons. He places that figure in context by noting that the average annual purchase in the decade before 2022 was approximately 400 to 500 tons, meaning central bank gold acquisition has more than doubled in pace over the past three years.

Miller references World Gold Council survey data indicating that 95 percent of central banks expect their gold holdings to continue rising, with not a single respondent projecting a decline. The institutions driving this accumulation are not marginal actors. Miller identifies the BRICS bloc and emerging markets powers including China, India, Turkey, Poland, Kazakhstan, and Brazil as the primary buyers. He notes that BRICS nations now hold over 17 percent of the world’s official gold reserves, up from approximately 11 percent in 2019, while the dollar’s share of global reserves has been quietly declining. The World Gold Council publishes annual central bank reserve surveys that document this trend in institutional detail.

The analytical weight Miller places on this mechanism is that central bank gold accumulation is not a theoretical signal, it is a measurable, ton-denominated reallocation by the most sophisticated holders of capital on earth, occurring at a pace that has no precedent in the modern era. Debt debasement is, in his framing, what central banks are hedging against when they shift from paper reserve assets to physical gold. The de-dollarization trend, he argues, is not a political slogan but a quantifiable movement of tons from paper systems into vaults, and fund managers who treat it as noise rather than signal are missing the most important positioning intelligence available to them in this environment.

Debt Debasement in Four Stages — The Sequence Fund Managers Should Map Against Their Portfolios

Debt debasement does not arrive as a single event, and Miller outlines a four-stage sequence that he argues follows the same historical pattern across every overindebted sovereign that has taken this path. Stage one is “higher for longer becoming permanent,” the expectation that interest rates will return to pre-2022 norms simply fails to materialize, because the term premium is now structurally elevated and price-sensitive buyers will not lend cheaply to a heavily indebted borrower. Miller states that this stage is already underway, observable in the persistence of elevated rates despite widespread expectations of a return to the prior normal.

Stage two is what Miller calls the squeeze, the point at which interest consumes a large enough share of the federal budget that political pressure to reduce rates becomes driven by the government’s own borrowing costs rather than by economic conditions. Debt debasement enters its most consequential phase here, as fiscal policy begins to quietly dictate monetary policy. Miller identifies the linguistic markers to watch for: arguments for flexible inflation targets, political pressure on central bank independence, and framing around the need to keep government borrowing costs “sustainable.” The IMF has published extensive research on fiscal dominance and how it historically reshapes monetary policy decisions.

Stage three is financial repression, the mechanism that reaches most directly into institutional portfolios. Miller describes this as the deliberate engineering of an environment where nominal interest rates sit below the rate of inflation for extended periods, producing negative real rates. Every holder of cash and government bonds loses purchasing power continuously and by design, and that lost purchasing power is precisely what erodes the real value of the government’s debt burden. Debt debasement at this stage is often reinforced, he notes, by regulatory nudges that push banks, pensions, and insurers to hold more government debt under the justification of safety, creating captive demand exactly when the government most needs buyers. Miller cites this as the documented playbook used by the U.S. and Britain to work down their World War II debt loads.

Stage four is the repricing of real assets, the point at which capital that has internalized negative real rates floods toward hard assets, monetary metals, and infrastructure with pricing power. Miller notes that central banks are already executing this stage at scale, front-running the retail realization of debt debasement by years.

Debt Debasement Positioning — The 4 Moves Miller Outlines for Allocators in an Educational Framework

Debt debasement awareness without a positioning framework is incomplete, and Miller dedicates the latter section of the episode to four moves he presents explicitly as educational frameworks for how an allocator thinks about this regime, not as investment advice or a guarantee of any specific outcome. Move one is understanding who gets confiscated and ensuring you are not among them. In a debt debasement regime, the wealth transfer runs from lenders to borrowers, and the single largest borrower on earth is the U.S. government. The holders of long-duration nominal government bonds are the lenders, and those bonds are the assets most efficiently targeted by financial repression. Miller frames this as an awareness move: understanding how much long-duration nominal government debt is actually in your book is the foundational step.

Move two is to shorten duration and favor floating rate exposure where government paper is held for liquidity or mandate reasons. Short-dated bills reprice with rates rather than locking in below inflation, and inflation-linked instruments shift some of the debt debasement risk back to the issuer by adjusting principal with the price level. Miller’s framing here is structural, in a regime where the policy plan is to inflate, cash flows that reset with inflation are fundamentally different in character from cash flows frozen at a nominal rate while real purchasing power erodes underneath them. The mechanics of Treasury Inflation-Protected Securities are well-documented by Investopedia as a starting reference for understanding how inflation linkage functions in practice.

Move three is what Miller describes as the alternative assets play, a debasement barbell built on two sides. The first side is real assets with pricing power and inflation-resetting cash flows: regulated infrastructure including power, water, and toll roads with rate structures that adjust with inflation; farmland and energy reserves that are scarce by nature; and real estate only where genuine rent-setting ability exists. Miller is explicit that a building with long, flat leases and no ability to raise rents is, in a debt debasement environment, a levered bond in disguise and subject to the same slow confiscation. The second side of the barbell is monetary hedges, gold, and for allocators with appropriate mandate and risk tolerance, a measured allocation to hard-scarcity digital assets. Miller frames the gold position not as apocalypse insurance but as holding the same asset the world’s central banks themselves are accumulating for the same reason they are accumulating it.

Move four closes the framework back into private markets specifically. Debt debasement, Miller argues, makes floating rate private equity credit with real covenants and collateral a structurally aware instrument, lenders at rates that reset, secured by real assets with protections that do not evaporate with the currency. He then connects this directly to capital raising, which is the through-line of the Making Billions franchise. Family offices, pension funds, and endowments are examining the same fiscal math, and Miller argues they are actively searching for managers who can articulate a coherent debt debasement thesis and offer real asset, inflation-aware exposure. The fund manager who can do that, in his framework, is the manager who raises capital in this environment, because the trust that builds an LP relationship is now, increasingly, the trust that you understand what is happening to the money itself.

Debt Debasement — Steel-Manning the Other Side Before Committing to the Framework

Debt debasement is a thesis that deserves rigorous challenge, and Miller models what he calls the obligation of any serious allocator: the ability to argue against your own position. He presents three counter-arguments to his framework that he treats as genuine and worthy of respect. First, the U.S. still operates the deepest, most liquid capital markets in human history, and no credible alternative to the dollar exists at scale. Europe carries its own structural debt problems, China maintains capital controls and a closed financial system, and gold produces no yield and cannot run a global economy. The de-dollarization trend is real, Miller acknowledges, but it is occurring at the margin, a shift of a few percentage points of reserves, not a wholesale abandonment of the dollar system.

Second, Miller notes that the U.S. has faced debt collapse predictions every decade since the 1980s, and investors who positioned for that collapse have consistently been run over while U.S. assets outperformed global alternatives. Being early on this debt debasement thesis has historically been expensive, a point that deserves weight in any honest analysis.

Third, American productivity and innovation remain genuinely exceptional, and if artificial intelligence and energy development drive a real productivity boom, the U.S. could grow its way into a more manageable debt-to-GDP ratio without dramatic debasement. He notes this is not a fantasy, it happened after World War II, when productivity growth helped resolve a structurally similar debt burden. The Brookings Institution has documented the post-WWII debt reduction experience and the combination of growth, financial repression, and modest inflation that produced it.

Miller’s response to these counter-arguments is precise: none of them require a collapse to be wrong, and none of them eliminate the debt debasement risk they push back against, they only moderate its severity. Even in the optimistic scenario where the dollar remains dominant and productivity growth is strong, the most probable path through the current fiscal math still runs through a period of real rates held below inflation to manage the interest burden. The real asset barbell he describes does not require the apocalypse to be a rational educational framework. It requires only that an indebted sovereign does what every overindebted sovereign in history has done: protect itself at the expense of its lenders. Debt debasement is the gentlest version of that, and it does not need to be dramatic to be consequential for fund managers and their LPs over a decade.

Debt Debasement as a Capital Raising Edge — The Fund Raise Formula Applied to the Macro Thesis

Debt debasement is not only a portfolio construction question for fund managers, it is a capital raising positioning question, and Miller connects the macro thesis directly to his core framework. He introduces what he calls the Fundraise Formula: capital equals trust times transaction. In the context of sovereign debt, he notes that a government bond is nothing but trust, specifically, the trust that the U.S. government will pay back in dollars that still hold their value over a 30-year horizon. As debt debasement erodes that trust at the margin, the repricing of the entire $29 trillion treasury market follows. Fund managers who can see where trust is thinning before the headlines catch up, he argues, are the ones positioned to act ahead of the crowd.

Miller extends this directly to the LP relationship. The family offices, pension funds, and endowments that constitute institutional LP capital are examining the same fiscal math that this episode presents. They are increasingly searching for managers who can articulate a coherent, rigorous debt debasement thesis and offer real asset, inflation-aware exposure as a structural response, not as a panic trade, but as a deliberate tilt that protects real purchasing power over a decade of potential negative real rates. According to Miller, the manager who can do this is the manager who raises capital in this environment because the trust that builds LP relationships now runs through demonstrating that you understand what is happening to the money itself and have built the vehicle to protect against it. For context on how institutional investors assess inflation risk and real asset allocation, Harvard Business Review has published analysis of how institutional allocators are approaching the inflation and purchasing power challenge.

Miller also introduces a practical tool for fund managers engaging with the debt debasement thesis, what he calls the U.S. Debt Debasement Exposure and Positioning Scorecard. He describes it as a framework that allows managers to plug in their duration, nominal bond exposure, real asset allocation, and floating rate mix to score how exposed they are to confiscation and how positioned they are for a debasement regime. The scorecard places managers in one of four tiers, from bondholder to hard money allocator, and is available as a free download linked in the episode notes. Miller’s framing of this tool is consistent with his broader educational mission: the debt debasement analysis on this show is the thinking, and the capital raising infrastructure of Fund Raise Capital is where that thinking becomes actionable at the fund management level. The manager who builds the real asset thesis now, in the quiet before financial repression becomes obvious, is the one who keeps LP capital and raises for the next fund, while the fund manager who waits for the moment it is obvious to everyone finds that the best entry is already gone.

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Ryan Miller BSc., MFin.
Host, Making Billions Podcast
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About the Host

Ryan Miller holds a Bachelor of Science degree and a Master of Finance and is the host of the Making Billions podcast, one of the leading institutional finance podcasts focused on alternative asset management, fund structuring, and capital raising strategy. He is also the founder of Fund Raise Capital, which he describes in this episode as the community where the thinking presented on the show becomes the capital infrastructure inside a fund manager’s business. Miller draws on personal experience building from the bottom up, and frames the debt debasement analysis in this episode through the lens of a practitioner who has managed capital for others and understands the LP relationship at an institutional level.

Ryan Miller can be found on LinkedIn at linkedin.com/in/rcmiller1 and through the Making Billions platform at making-billions.com. Fund Raise Capital, the community Miller references throughout this episode for fund managers looking to build capital raising infrastructure around the frameworks discussed, is accessible at go.fundraisecapital.co/apply.