Managing Financial Instability In 2025

MANAGING FINANCIAL INSTABILITY IN 2025

Updated February 20, 2025

The Trump/Vance administration has the potential to unleash widespread economic harms, many of which are not on people’s radar. This document is not financial advice and I am not a financial advisor. I am an analyst of history and warfare, and this is an analysis of current warfare operations.

We assess that the Presidency has been captured by Vladimir Putin. Until we see proof otherwise, assume that Elon Musk, Donald Trump, and JD Vance are proxies for Putin, Xi, and their allies. China backs Russia fully.^[1]
Russia’s strategic goal is to dismantle the United States. They will pursue this through creating internal turmoil and dysfunction^[2], trying to destroy the dollar^[3] and by “ending” the Federal Reserve^[4]. In addition, they have been backing secession efforts in multiple states (California, Texas, Alaska).
Russia believes that democracy doesn’t work.^[5] Because they think democracies don’t work, they believe they can be defeated and captured. The United States is the biggest prize. Canada and Europe are also targets.
Cryptocurrency products are likely to drive market instability. New proposals to eliminate capital gains tax on memecoins and other US-based crypto products may have a corrosive effect on equities markets.
Bitcoin is a weapon.^[6] Bitcoin sets up a zero-sum game between holders and non-holders, enhancing holders’ purchasing power while eroding the dollar and the purchasing power of non-holders. People who do not hold Bitcoin (or derivatives) will be impoverished at the expense of people who do. It is impossible to hedge by buying Bitcoin without eroding the value of dollar holdings. Importantly, Bitcoin is a Ponzi scheme that harms non-participants — i.e. it’s not enough to avoid it, and you can’t just ignore it.^[7] It must be destroyed, as 19th century Wildcat Banking was taxed out of existence. Republicans are now promoting Bitcoin, and the creation of a “U.S. Strategic Bitcoin Reserve,” which is intended to set off a vicious cycle that will spike the price of Bitcoin while undermining the dollar. Some Republicans favor government exposure to Bitcoin, while others appear to be advocating for the adoption of XRP, a rival. This situation is in flux.
Christian Nationalists also believe the dollar and the Fed must be destroyed.^[8] Elon Musk has indicated he would bring Ron Paul into his government efficiency effort. Ron Paul and Gary North created the “North/Paul” strategy decades ago with the express intent of crashing the US economy, killing the dollar, and replacing it with gold-backed money. Such plans are also compatible with Project 2025, and various crypto schemes.^[9] Rep. Thomas Massie (R-KY) also introduced the Federal Reserve Board Abolition Act in May 2024 to “End the Fed.” The same approach is also echoed by Sergey Glazyev, architect of the BRICS currency plan^[10]. Steve Bannon has also endorsed the same plan.^[11]

IMMEDIATE FINANCIAL RISKS

New executive orders introduce uncertainty. In its first week, the Trump administration has already begun issuing executive orders pausing the flow of federal dollars as well as radically reshaping the federal workforce. The economic implications of these changes are unknown, but are unlikely to be positive; they are effectively an anti-stimulus package.
A new federal budget must be passed by March 14, 2025. If a budget agreement cannot be reached by March 14, the US federal government will shut down until such time as some resolution is reached.
Musk and Johnson may propose massive cuts to the budget. Musk has been talking about imposing $2 Trillion in cuts to the ~$6 Trillion budget. Only 26% of the budget (about $1.6 Trillion) is discretionary spending. So Musk is talking about eliminating over 100% of the discretionary budget — all of it, and then some. The status of Musk’s DOGE efforts is not yet clear.
The risk of US debt default may be used as leverage to extract draconian cuts. If no budget is passed and/or the debt ceiling is not increased, the US may default on its debt, which would trigger a ~$15 Trillion global economic meltdown. Even flirting with default may trigger a downgrade of US creditworthiness, increasing interest costs and accelerating a crisis.
Establishment of a strategic Bitcoin reserve may trigger additional instability. Sen. Cynthia Lummis (R-WY) has proposed the creation of a “strategic Bitcoin reserve,” directing US treasury funds into Bitcoin. This will cause a Bitcoin price hike, enrich speculators, while simultaneously undermining equities and the dollar.

2025 TIMELINE

The most dangerous period will be the first six months of 2025, which is when the budget and debt ceiling issues must be addressed. The government has enacted “extraordinary measures” as of January 21, 2025, to limit cash expenditures.This will allow the government several months to try to raise the debt ceiling. A new federal budget must be authorized by March 14, 2025. The “X-Date,” the actual date of default, is likely to be in the spring of 2025. In the event that no resolution is reached to raise or eliminate the debt ceiling, default will likely occur around May 2025, triggering a global asset meltdown.

POTENTIAL MITIGATORY AND DEFENSIVE MEASURES

Diversify holdings. Given the threat landscape, it is difficult to know what might happen. A diversified portfolio is a good defense, including bonds, real estate, and some gold and silver ETF’s. Use caution not to incur tax costs while rebalancing; use tax advantaged accounts where appropriate to shift allocations. Share these concerns with your financial advisors.
Do not hedge with Bitcoin or crypto assets. While this might be tempting, it is important to understand that Bitcoin and “real economy” assets are opposed in a zero-sum game. Every asset in Bitcoin harms all your other assets, while helping speculators.
Protect your credit. Freeze your credit for free at the major agencies (Equifax, Experian, and TransUnion); you can easily unlock it if needed when making a major purchase. This is a reasonable precaution, but with personal information being potentially accessed and shared in government databases, it makes even more sense.
Lock down your online accounts. Consider changing your passwords and enabling two-factor authentication where possible. Favor OS-based or app-based two factor authenticators over SMS authentication, which can be hacked. Apple iOS and MacOS have built in solutions that can often be used, as do other platforms. Use password managers where possible and assign long, hard to guess, passwords.
Contact your representatives. Defeating Putin and his allies requires that traditional conservative Republicans break with the House Freedom Caucus and any extremist allies. Help your representatives understand these risks. Many simply do not.

BIBLIOGRAPHY

Bannon, Steve. “The End of the Dollar Empire.” Birch Gold, 2023. https://www.birchgold.com/bannon-dollar-empire/.

Bindseil, Ulrich, and Jürgen Schaaf. “The Distributional Consequences of Bitcoin.” SSRN Scholarly Paper. Rochester, NY, October 12, 2024. https://doi.org/10.2139/ssrn.4985877.

Corum, Lynn. “Project Russia: The Bestselling Book Series of Putin’s Kremlin.” South Central Review 35, no. 1 (2018): 74–100. https://doi.org/10.1353/scr.2018.0004.

Glazyev, Sergei. The Last World War - The US to Move and Lose, 2016.

Golumbia, David. The Politics of Bitcoin: Software as Right-Wing Extremism. Forerunners: Ideas First from the University of Minnesota Press. Minneapolis: University of Minnesota Press, 2016.

President of Russia. “Joint Statement of the Russian Federation and the People’s Republic of China on the International Relations Entering a New Era and the Global Sustainable Development,” February 4, 2022. http://en.kremlin.ru/supplement/5770.

“Project 2025: Mandate for Leadership, The Conservative Promise.” Heritage Foundation, 2024. https://static.project2025.org/2025_MandateForLeadership_FULL.pdf.

Scaminaci, James. “Fourth Generation Warfare, the Patriot Militia, and the North-Paul Strategy.” Accessed February 14, 2023. https://www.academia.edu/19378796/CHAPTER_18_FOURTH_GENERATION_WARFARE_THE_PATRIOT_MILITIA_AND_THE_NORTH_PAUL_STRATEGY.

Snyder, Timothy. “Decapitation Strike.” Substack newsletter. Thinking About... (blog), November 15, 2024. https://snyder.substack.com/p/decapitation-strike.

ADDITIONAL FREQUENTLY ASKED QUESTIONS

Q: Should I move to another country?

A: Changing your primary residence and/or citizenship is an arduous process. Financially speaking, it probably won’t help much, and you’ll incur expenses. However, investment properties in other countries and additional visa options (such as Digital Nomad or Non-Lucrative) may be worth pursuing to distribute risk, depending on your situation.

Q: Trump has said he will impose tariffs on Canada, Mexico, and China. Is this something to worry about?

A: We’re still waiting to see how this plays out; he may be using this as a strategy to get leverage over these countries. Debt default and attacks on the dollar are likely to be far more damaging, but if tariffs are imposed, that will only amplify all other harms.

Q: Is Social Security safe?

A: Perhaps not, if budgets are slashed. But killing it will require overcoming significant political inertia. Contact your representatives.

Q: Will the banking system hold up?

A: Probably. But consider spreading funds across multiple banks. FDIC, which typically insures up to $250,000 per bank, may also be at risk.

Q: Should I invest in other currencies besides the dollar?

A: Other popular currencies have dependencies on the dollar and will be subject to shocks as well. Given the dollar’s historic strength, it probably doesn’t make sense to incur costs to pursue such a strategy. Ask your financial advisor.

Q: Is there any reason to hold paper cash or physical gold (or other metals)?

A: Ask your financial advisor, but unless you have means to secure such things well, the risks probably outweigh any benefits.

Q: How will this get resolved?

A: When mainstream Republicans realize their party has been captured by a hostile foreign power, that their financial security is at grave risk, and they take action to deal with that fact. Help them understand that’s what’s happened.

Q: Why does Russia want to attack the dollar? And why are Republicans helping them?

A: Russia hates the dollar because it is at the core of American hegemony. They also seek revenge for the collapse of the USSR, which they believe was caused by attacks on the Ruble. Many Republicans hate the Federal Reserve and fiat currency. They prefer the gold standard, which is also aligned with Putin’s BRICS currency effort.

Q: Is “the Fed” the same as FDIC?
A: No. “The Fed” is the Federal Reserve Bank system, which manages interest rates and the dollar under Congressional authority, with a dual mandate to minimize both inflation and unemployment. The FDIC is the Federal Deposit Insurance Corporation, which insures bank deposits. It is also at risk, but they are not the same.