As covered in the previous post below, the US treasury secretary, Scott Bessent, is currently buying back long term treasuries with money raised by selling short term T-bills. This is shifting the US debt burden from longer term debt instruments at an interest rate in the danger zone for an exploding debt scenario towards short term debt at lower rates. The market sets the rate for longer term debt, while the interest rate on T-bills is under the control of the Fed, so Bessent is seeking both a lower interest rate and greater control. As discussed in the post below, this shift is in preparation for a transition to digital finance through stablecoins, which are to be pitched globally at the retail level.
Stablecoins are backed by US T-bills one to one, and global retail adoption is intended to provide captive demand in perpetuity. A stablecoin system would be very profitable for the issuer, as T-bills pay interest that would go to the issuer, not to the holder of the coins. This is, of course, why the Trump family has set up World Liberty Financial, and corruptly gained a banking licence. Their USD1 coin appears to be intended to replace the existing USD system, although this goal could be described as optimistically ambitious. The question becomes how would they engineer the transition from the existing system to all-digital finance when so many people are already skeptical about digital ID and programmable central bank digital currencies (CBDCs).
Stablecoins would be just as programmable, and as effective a tool of central control as CBDCs, but even less transparent and with even less accountability. Fewer people understand this than understand the risks of CBDCs though. Stablecoins would be marketed for convenience, and they genuinely would be convenient, but they would also be a trap. Digital finance is intended as a pathway to a new form of feudalism, with unaccountable oligarchs ruling over an underclass of surveilled and controlled powerless serfs in their respective fiefdoms. The risks associated with a large underclass would be mitigated through the degree of surveillance and control, which, if the system works as planned, would be greater than any previous authoritarians would have dreamed of. Gaza prior to the events of October 7th was the pilot project for the surveillance aspects of this.
Recently the media has covered scare stories about AI escaping confinement, tricking operators, and conspiring to achieve its own unpredictable goals. This could be laying the psychological groundwork for exactly the kind of event needed to force the transition to digital finance. In fact such a scenario has already been wargamed, and this is usually done for a reason. For instance, Event 201, which wargamed a coronavirus pandemic, occurred shortly before covid emerged. The AI wargame – Operation Blackout – was set on a hypothetical election day, simulating a coordinated attack on critical infrastructure with a view to having the election cancelled, and this succeeded. Considering that Trump has already tried to cling to power after an election loss, and is currently trying to pass voter suppression legislation prior to the midterms he’s on track to lose, it’s not much of a stretch to imagine such a scenario playing out in the not too distant future.
Klaus Schwab of the WEF has been promising a massive cyberattack for some time, and has mentioned it potentially affecting the financial system. It would be possible to wipe out bank balances and blame it on AI, giving plausible deniability to the actual actors behind it. People could then be promised the return of their money, but only in digital form. Most people would have little choice but to accept, as the alternative would be destitution. If this occurred around an election, as wargamed, it would keep the incumbent in power while allowing for a period of major financial consolidation and centralisation of power. This happened during covid, when big businesses were able to steal market share from smaller players because the smaller ones were subjected to much stricter rules around operation, and many went under. This time the centralising impetus would be much greater, and the ability to resist would be greatly reduced.
This would amount to severe financial repression, with people’s private wealth confiscated to prop up the credit ponzi and extended the debt cycle a little further. The head of the European Commission has recently been talking about the need to mobilise people’s savings and make them available to businesses, suggesting that multiple players are party to attempting to engineer the transition. In the American context, success may hinge on keeping the Trump regime in power, but this may be challenging given his failing mental and physical health. It’s unclear whether JD Vance would be able to consolidate power if Trump were to die in office, as he doesn’t appear to have Trump’s grasp of the mafia tactics he uses to control people. There may not be much time to implement the digital plan, given that the financial system is already fragile due to massive over-leverage and a shortage of collateral. If the powers that be are to deliver the transition, which is existential for them, they need to act quickly, meaning that the rest of us need to brace for impact.
