The United States government is staring into an abyss of its own making. With the debt ceiling suspended and the Treasury's cash reserves dwindling, the world's largest economy is on the brink of what analysts are now calling a 'digital default.' The term is mine, but the phenomenon is real.

It describes what happens when the Treasury can no longer roll over its debt in the capital markets, forcing a suspension of payments on digital obligations. The yield on the 10-year Treasury note has spiked, the dollar is under pressure, and the equity markets are convulsing. This is not a drill.

This is a fiscal emergency born of decades of profligacy. In the City, we watch with grim fascination as the epicentre of global finance trembles. The government's spending habit has become a crack cocaine addiction: insatiable, self-destructive, and ultimately unsustainable.

Meanwhile, the Federal Reserve faces an impossible dilemma. Raise rates to defend the currency, and risk a recession. Cut rates to ease borrowing costs, and invite inflation.

The path of least resistance has already been chosen: more debt, more printing, and more moral hazard. The consequences are already manifest. Capital is fleeing, not just from Washington, but from the dollar itself.

Gold is surging. Bitcoin is rallying. The era of fiat triumphalism is over.

The market is a cold, unforgiving taskmaster. It demands fiscal discipline, and it punishes those who ignore it. The question is no longer if the US will default on its digital obligations, but when.

And the answer is: sooner than anyone in Washington is willing to admit.