What if a debt jubilee wipes out student and household loans?
A debt jubilee is an inflation-and-confidence shock: monetized household-debt relief lifts inflation expectations and steepens the long end (30y>10y), softens DXY and bids gold/BTC as debasement hedges. No precise analogue; it rhymes with large unfunded fiscal-transfer impulses (the 2020-21 stimulus-driven breakeven surge, 1970s monetization). Skeptic: the consumption boost is front-loaded and one-off while the term-premium and inflation-credibility damage is persistent - so the durable trade is short the long bond and long real assets, fading any transient equity-relief pop.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 3–10 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A student/household-debt jubilee is enacted, reshaping consumption and credit. The trigger decomposes into signed root‑shocks — Inflation expectations ▲ · Dollar/reserve confidence ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +2.2% hist -1.77–+6.48% · other way +26.53% (n=12) |
| 2 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +1.2% hist -1.69–+1.15% · other way -0.04% (n=12) |
| 3 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +1.2% hist -0.17–+2.0% · other way +4.14% (n=11) |
| 4 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +8bp hist +0.67–+4.96% · other way +1.8% (n=12) |
| 5 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.9% hist -0.4–+1.93% · other way +22.24% (n=10) |
| 6 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +7bp hist -2.32–+3.97% · other way +0.6% (n=12) |
| 7 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.7% hist -2.08–+2.56% · other way -2.35% (n=10) |
| 8 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.7% hist -0.39–+0.37% · other way +1.18% (n=12) |
| 9 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +0.6% hist -1.21–+0.53% · other way -1.44% (n=12) |
| 10 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▲ +0.5% hist -0.55–+1.07% · other way +3.01% (n=10) |
| 11 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▲ +0.5% hist -0.8–+0.38% · other way -0.53% (n=12) |
| 12 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▲ +0.4% model prior · unmeasured |
| 13 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.4% hist -0.37–+0.36% · other way +0.2% (n=12) |
| 14 | Tech sector XLK 📈 chart | Equity | ▼ -0.4% hist -0.5–+0.38% · other way +0.36% (n=12) |
Probable recommendation
Why we may diverge from history
Trust history on USDJPY/DXY: eleven clean, recent 2022 dollar-up analogues (hit-rate 0.91-0.92) dominate the cascade's weak debt-jubilee dollar-down path — fiscal transfers don't out-pull a hawkish-Fed reserve bid.
Historical precedent — what analogous events actually did
Across 36 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| INR INR | SHORT | -1.4% · 5d -0.1% | 74% | 19 | 0.45 | ⚠ differs |
| EURUSD EURUSD | SHORT | -1.3% · 5d -0.4% | 68% | 19 | 0.33 | ⚠ differs |
| GBPUSD GBPUSD | SHORT | -0.9% · 5d -0.2% | 68% | 19 | 0.33 | ⚠ differs |
| 10y yield DGS10 | SHORT | -5bp · 5d -4bp | 63% | 35 | 0.26 | ⚠ differs |
| US dollar DXY | LONG | +0.6% · 5d +0.6% | 63% | 35 | 0.24 | ⚠ differs |
| Gold XAU | SHORT | -2.1% · 5d -0.8% | 60% | 20 | 0.19 | ⚠ differs |
| 30y yield DGS30 | SHORT | -2bp · 5d -1bp | 58% | 33 | 0.16 | ⚠ differs |
| SOL SOL | SHORT | -2.8% · 5d -11.7% | 62% | 8 | 0.15 | ⚠ differs |
| AUD AUD | SHORT | -0.7% · 5d +0.1% ↺ fades | 58% | 19 | 0.15 | ⚠ differs |
| KRW KRW | SHORT | -1.4% · 5d -0.0% | 58% | 19 | 0.13 | ⚠ differs |
| SPX SPX | SHORT | -1.9% · 5d -1.2% | 56% | 35 | 0.12 | ✓ matches cascade |
| NDX NDX | LONG | +0.6% · 5d -0.8% ↺ fades | 57% | 28 | 0.11 | ⚠ differs |
| CNY CNY | SHORT | -0.7% · 5d -0.1% | 55% | 20 | 0.10 | ⚠ differs |
| USDJPY USDJPY | SHORT | -0.2% · 5d -0.5% | 52% | 23 | 0.04 | ✓ matches cascade |
Why this probability
Broad debt jubilee is politically extreme; partial forgiveness exists but full jubilee remains rare. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.