Why Fiat is Dying and How to Escape it
How governments will rob you through inflation
I’ve been thinking a lot about one of the most important forces shaping our world right now. It rarely makes the headlines. It’s easy to miss if you’re not looking closely.
But if you understand it and build accordingly, it can mean the difference between real freedom and a slow quiet financial bleed.
I’m talking about the silent default.
Here’s the uncomfortable truth. Many governments around the world are functionally bankrupt. They will never openly say it. They can’t.
Instead, they will inflate away their debt, and with it, the value of your savings, your income, your future purchasing power.
This is not a conspiracy theory. It is the logical endgame of a system drowning in unpayable debt.
I see it everywhere. The US alone is adding over $1 trillion in debt every 100 days. Japan has already shown how far you can push financial repression. Europe is right behind.
There is no political appetite to reverse this. There is no magic GDP growth coming to fix it. Raising taxes won’t be enough.
Inflation is the path. They will print. They will devalue. They will pretend otherwise.
And many investors will get crushed because they will trust nominal returns in a world of shrinking real value.
But there’s another layer. A more subtle trap.
In a silent default world, traditional financial advice becomes dangerous.
Diversify across stocks and bonds? Bonds will kill you.
Hold cash for safety? You are funding the default with your own wealth.
Rely on government pensions or fixed income products? You are the primary target of the stealth tax called inflation.
I’ve seen too many smart people fall into these traps. Not because they’re naive, but because they’re playing by rules that no longer apply.
We are not in a normal cycle. We are in a global financial repression regime.
Central banks will keep rates artificially low. Inflation will run structurally higher. Real yields will stay negative. This is the mechanism of the silent default.
And yet the average investor will celebrate every time their portfolio hits a new nominal high, not realizing they are treading water or worse, sinking slowly.
So how do we adapt? How do we build systems that can thrive in a silent default?
Here’s what I’m doing, and what I suggest for anyone who wants to live free in this new reality.
Never trust cash alone. Fiat is a melting ice cube, but going all risk-on is reckless. You need to move consciously between flow, core, and optionality boxes.
Hold core assets you will never sell. For me, this includes BTC as hard money, gold as a store of value, and select dividend-generating equities that can survive and adapt in inflationary regimes. I think of these as my personal central bank reserves.
I do not expect them to shoot up in price every month. I expect them to defend and store purchasing power across decades.
Live from flow. This is critical. Monthly cashflow is what buys you freedom, not net worth on paper. I prioritize assets that produce real flow: real estate, select dividend stocks, royalties. Flow allows you to hold core forever.
I cannot emphasize this enough. When you live from flow, you stop fearing market volatility. You stop needing to sell your best assets just to pay the bills.
Use debt intelligently. I am comfortable using margin and leverage, but only against core assets and only when terms are favorable. Long fixed rates where possible. You must avoid margin on fragile assets, and never overextend.
In fact, well-structured intelligent debt is one of the strongest tools we have in a silent default. Inflation erodes debt. If you borrow today at a fixed rate, and the currency keeps devaluing, you are effectively paying back the loan in cheaper units.
But this only works if your collateral is robust and your debt is intelligently sized. Reckless leverage kills. Smart debt compounds freedom.
Stay liquid, stay optional. I keep a liquidity box ready at all times. I want to be the buyer when markets freeze and others panic. This is where asymmetric gains happen.
In the last few years, I’ve seen too many investors with beautiful portfolios on paper, but no optionality. When the system wobbles, they can’t act. Or worse, they are forced sellers.
Liquidity is not an inefficiency. It is a weapon. You want to be the shark, not the prey.
Stop thinking in fiat terms. This is the mental shift I’ve seen make the biggest difference. I no longer measure wealth in dollars or euros. I think in terms of real purchasing power and in terms of freedom flow.
If I can live the life I want, maintain my core assets, and stay liquid to attack dislocations, I am winning. I don’t care if the fiat number on the screen jumps or dips by 10%.
This system is fragile. It will break again. The cracks are already visible.
When it does, I want to be in a position of strength, not scrambling for answers.
The silent default is the backdrop of the next decade. You can choose to be a victim of it, or to use it as fuel to build true freedom. The choice is yours.
How I would approach it from a fully asymmetric perspective
Hold core hard assets that I will never sell: BTC, gold, and select dividend equities
Build flow-first cashflow engines: real estate, dividends, royalties to fund life without selling core
Use intelligent margin against core assets with long fixed rates, avoid fragile leverage
Keep liquidity ready to strike when the system breaks again
Constantly reframe wealth, not in fiat but in freedom flow and purchasing power