The US bond market is in risky territory, with interest rates on the thirty year now over 5% and the ten year heading in that direction. Buyers are not showing up, and several countries may be on the verge of selling existing holdings as their own economies deteriorate. With $40trillion in debt (and vastly more in unfunded liabilities) combined with sluggish economic growth, the higher interest rates needed to attract buyers would create an exploding debt scenario. The higher rates reflect a loss of confidence in the dollar, due to a loss of confidence in an obviously corrupt government implementing policies that are either nonsensical, counterproductive, or outright criminal, and then changing those policies in according with the whims of the Mad King. When confidence is failing, the risk premium associated with holding their sovereign debt rises.
Treasury Secretary Bessent is currently engaged in large scale buy-backs of longer term treasuries, paid for by issuing a flood of short term T-bills, for which there’s still plenty of demand, meaning the interest rate is significantly lower. Over time this could lead to a scenario where government debt was constantly rolling over, and even shorter term rates could well be rising. Bessent’s reputation is for profiting from chaos, as he did when he worked for Soros and afterwards, and that pattern appears to be about to repeat itself. The plan appears to be to destroy the dollar by deliberately undermining confidence, and also shorting it to profit off its potential demise. The plan could, however, be derailed by a knee-jerk flight to ‘safety’ into the reserve currency, and by market participants demanding dollars to pay down dollar-denominated debt.
The most ambitious and audacious aspect of what the regime has in mind is far more nefarious than merely extracting profit from a collapsing system. Converting the debt to primarily T-bills lays the groundwork for the promised digital financial reset. Stablecoins are backed one to one by T-bills, and the intention is to market stablecoins at the retail level worldwide. If successful, this would have the effect of creating permanent captive demand for US debt, while collapsing other fiat currencies along with the commercial banking system. The Trump sons, and Steve Witkoff’s son, are positioning themselves for this eventuality with a company called World Liberty Financial, which issues the stablecoin USD1. The regime has just corruptly granted this endeavour a banking licence. No doubt the intention is eventually to dominate what would amount to a privatised global financial system in their hands, where the founders would profit from every transaction worldwide.
The question becomes what are the prospects for this to succeed. There would be powerful opposition from the current central banking system under the Bank for International Settlement. There would also be opposition from powerful sovereign countries such as Russia, China and Iran, which are looking to build a multipolar world to replace American hegemony. The parties in opposition still want a fully digital financial reset, but they will refuse to be subjugated under a US version and likely cannot be pressured into it as the US has no leverage over them. China is already creating an alternative digital cross border payment system and onboarding participants. In addition, the circular financing bubble around the AI build-out is going to implode, as all ponzi schemes eventually do, and when it does, the fallout is not going to be controllable. The Epstein class will try to buy up everyone else’s assets at distressed prices, but extremely centralised plutocracy will not be stable, and may well end in revolution.
Apart from financial competition and imploding ponzi finance, the energy crisis due to the wars is likely to derail many plans. The ability to maintain, let alone increase, complexity rests on the availaiblity to society of surplus energy. Even before the widespread destruction of energy infrastructure, the energy profit ratio (the comparison between the energy input and output for an energy project) for energy production globally had been falling rapidly. The wars have accelerated this process considerably, and the destruction is unlikely ever to be reversed. A programmable digital financial system would be a substantial jump in system complexity at a time when even maintaining the existing level of complexity is not going to be possible.
Ultimately, failure is inevitable. Instead of the planned totalitarianism, the world is more likely to see a period of anarchy, with considerable variation in fortunes depending on local circumstances. Most people are unaware of what their local circumstances would be in the absence of the globalisation that most are accustomed to, and it would be a good idea to learn and prepare in advance. There may not be much time left to do so.
