# Connecting High Debt and Slow Growth to Crypto: Insights for Degens

By [Nksnp2](https://paragraph.com/@nksnp2) · 2025-12-09

world finance  macro  global economy  debt  crypto  base  onchain  risk management

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Why I care about “boring” world finance as a crypto degen
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Most people come to crypto for:

*   volatility,
    
*   memes,
    
*   and the chance to turn a small stack into something bigger.
    

Very few come here saying:

> “I’m so excited to read about government debt and GDP growth.”

But whether we like it or not, **macro is the water we’re all swimming in**.

*   When money is cheap, risk assets pump harder.
    
*   When money is tight, liquidity disappears and even strong projects bleed.
    
*   When governments and central banks are stressed, narratives like “hard money”, BTC, and stablecoins get louder.
    

So in this chapter, I want to do something simple:

> Take one big theme in world finance –  
> **high debt + slow growth** –  
> and show how I, as a normal degen, connect it back to my crypto decisions.

No jargon. Just a mental model you can reuse.  

![](https://storage.googleapis.com/papyrus_images/9b901e8ee2a2d3e2bd27e9799361ba8ba964b13eebcdaa545cf1e13272f4b328.jpg)

The world is basically running on debt and hope
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You don’t need exact numbers to feel it:

*   Governments have borrowed a lot over the last decades.
    
*   Interest rates went from “almost zero” to “painful” very fast.
    
*   Economic growth is… okay at best, but not explosive.
    

That mix creates a weird cocktail:

1.  **Governments owe a lot and now have to pay higher interest.**
    
2.  **Central banks are stuck between fighting inflation and not killing growth.**
    
3.  **Everyone is hoping growth will magically outrun the debt… someday.**
    

It’s like running on a treadmill that slowly speeds up.  
You can stay on for a while, but you’re always one misstep away from flying off.

Why should a crypto degen care?

Because this background:

*   shapes interest rates,
    
*   shapes risk appetite,
    
*   and ultimately shapes how much “fun money” flows into crypto and onchain experiments.
    

How this shows up in normal people’s lives:

*   Their **cost of living** is higher (food, rent, utilities).
    
*   Their **debt is more expensive** (credit cards, car loans, mortgages).
    
*   Their **job feels less secure** if the economy slows.
    

When high debt + slow growth stays with us:

*   People spend more money on surviving,
    
*   less money on investing or speculating,
    
*   and become more sensitive to shocks (job loss, rate hikes, market crashes).
    

That matters because:

> If people feel poor, scared, or overleveraged,  
> they won’t YOLO into risk the way they did in “free money” times.

Even crypto native money has an origin:  
someone’s paycheck, someone’s business, someone’s leverage.  

![](https://storage.googleapis.com/papyrus_images/6c87d1b0c0e3d9dd686bd8037b6088bb46645d2ba26c52b2f2ea77c98a4a7796.jpg)

What it does to markets (in one simple picture)
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When the world runs on high debt and growth is meh, the game changes.

Here’s how I visualize it:

1.  **Bonds and interest rates**
    
    *   Governments need to sell a lot of bonds to roll their debt.
        
    *   If investors demand higher yields, financing gets more painful.
        
    *   Central banks can’t cut rates to zero easily without risking new inflation waves.
        
2.  **Equities and big tech**
    
    *   Profitable, strong companies can survive higher rates.
        
    *   Hype sectors (like AI) can boom, but they’re also at risk of “bubble then crash” dynamics.
        
3.  **Risk assets (including crypto)**
    
    *   Money still flows to risk when people believe in growth and narratives.
        
    *   But when stress hits, **liquidity is pulled from the edges first** –  
        small caps, altcoins, illiquid tokens, random DeFi farms.  
        
        ![](https://storage.googleapis.com/papyrus_images/ee2890b3778446e9f7d55101ec59330cd07953ceb53306499cdfc22a0f03108f.jpg)
        

In short:

> In a high-debt, slow-growth world,  
> I assume **boom–bust cycles in risk assets get sharper**,  
> and I don’t count on “infinite Fed rescue” like people used to.  

Where crypto fits in this world
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Crypto plays a strange double role in this environment:

### 5.1 As a “way out” of the system

Narratives like:

*   BTC as digital hard money
    
*   stablecoins as parallel dollars
    
*   DeFi as an alternative to banks
    

…all become louder when people feel that the old system is creaking.

High government debt + currency debasement fears =  
more people at least **look at** crypto, even if they don’t fully understand it.

### 5.2 As a high-beta risk playground

At the same time, crypto is:

*   one of the riskiest corners of global markets,
    
*   highly sensitive to liquidity conditions,
    
*   dominated by speculation and leverage.
    

So crypto can:

*   benefit from distrust in traditional finance,
    
*   but also **get crushed** when global risk appetite collapses.
    

That’s why I never tell myself a simple story like:

> “World is broken → crypto only goes up.”

Reality is more like:

> “World is stressed → volatility and narrative trading get stronger.  
> If I manage risk well, I can survive and maybe thrive in that volatility.”  
> 
> ![](https://storage.googleapis.com/papyrus_images/b19448cc3e41acbf66e433162f11546c99a9af6deda27e678b287df62d55cf90.jpg)

How I use this macro view in my onchain behavior
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Here’s how this “World Finance #1” lens actually affects the way I move on Base and in crypto in general.

### 6.1 I expect **liquidity to come and go in waves**

In a high-debt, slow-growth world:

*   Good times are not permanent.
    
*   Liquidity spikes can be followed by brutal withdrawals.
    

So when I see:

*   euphoric price action,
    
*   aggressive leverage,
    
*   everyone flexing PnL,
    

I remind myself:

> “This is a wave. Waves don’t last forever.”

It doesn’t mean I sit out every rally.  
It means I don’t build my identity or portfolio around “this rally must continue”.

### 6.2 I’m stricter with **position sizing**

Because the macro backdrop is fragile:

*   I’m more conservative with how big I size into narratives,
    
*   especially high-beta plays like memecoins or small-cap tokens.
    

I still play.  
But I play expecting the music to stop at unpredictable times.

When I think about Base, $JESSE, or any chain-level narrative:

*   I allow myself to be early.
    
*   But I don’t allow myself to be _all-in_.
    

### 6.3 I ask: “Where does this yield / return actually come from?”

In a world where:

*   governments struggle with debt,
    
*   banks are under pressure,
    
*   and real yield is rare,
    

Any time I see **crazy yields in crypto**, I ask:

> “Is this yield just another form of leverage or ponzinomics,  
> or does it actually come from real activity or risk transfer?”

This macro-aware question saves me from chasing pure illusions.  

![](https://storage.googleapis.com/papyrus_images/b19448cc3e41acbf66e433162f11546c99a9af6deda27e678b287df62d55cf90.jpg)

A simple macro → crypto framework you can reuse
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You don’t need to become a full-time macro nerd.  
But I think having a basic checklist helps.

When I look at world finance, I roughly ask:

1.  **Is debt rising faster than growth?**  
    → If yes, future stress is baked into the system.
    
2.  **Are interest rates high relative to the last decade?**  
    → If yes, I assume cheap money is gone for now.
    
3.  **Are people feeling richer or poorer in real terms?**  
    → If poorer, I expect less “crazy retail risk-taking” overall.
    
4.  **Is my crypto positioning aligned with that reality?**
    
    *   Am I overexposed to illiquid bets?
        
    *   Am I relying on a constant inflow of fresh money?
        
    *   Am I assuming “this time is different” in a naive way?
        

If these answers don’t look healthy, I adjust—  
even if the charts look good in the short term.  

![](https://storage.googleapis.com/papyrus_images/07a323f5088fbe5b91a8078e872b7c622ebb018c87d46ecddfb2cbb1be79078d.jpg)

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*Originally published on [Nksnp2](https://paragraph.com/@nksnp2/connecting-high-debt-and-slow-growth-to-crypto-insights-for-degens)*
