The Trigger
When the Debt Regime Breaks
The Trigger Scenario
A true black swan (or convergence of multiple crises) ruptures confidence in the debt regime:
- Repo market or short-term funding freezes (happened in 2008, nearly in 2019)
- Shadow banks can't roll overnight funding
- Collateral chains break
- Forced liquidations cascade across all asset classes simultaneously
- Everything tries to exit the door at once — nobody on the other side to buy
Two Catastrophic Outcomes
Any president — regardless of party — faces two catastrophic outcomes with no good choice:
- Let the system collapse → economic chaos → civil unrest
- Bail out elites again + more austerity for working people → civil unrest from betrayal
The Third Path
The Stay and Rebuild Doctrine provides a third path: intervene, but restructure who pays.