Tariffs, Treasury access, and a stablecoin scheme designed to extract billions
I fell down another rabbit hole this morning while researching the Epstein Files – this is not about that – but still something I think is very important to wrap our heads around.
Before I explain what’s happening, let me break down some finance basics so this makes sense.
A bond is basically an IOU. When you buy a government bond, you’re lending the government money, and they promise to pay you back with interest. Government bonds are considered super safe, so when people get scared about the economy, they rush to buy them.
Here’s the key thing: when lots of people want bonds, their price goes up. But when prices go up, the interest rate (called the yield) goes down. It’s like a seesaw. Bond prices up, yields down. Bond prices down, yields up.
So if you already own a ton of bonds before something scary happens to the economy, you make money when everyone panics and rushes to buy bonds too.
Now let’s talk about who’s running our economy.
Scott Bessent is the Treasury Secretary. He used to work for George Soros, where he helped make over a billion dollars in 1992 by betting against the British pound. Then in 2013, he made another billion betting against the Japanese yen. This guy’s entire career is making money by predicting economic chaos and betting on it.
Now he runs the Treasury. When Trump’s tariffs sent the bond market into convulsions in April, yields spiking so fast that Wall Street started whispering about a liquidity crisis, Bessent went on Fox Business with a straight face. “This was driven by the president’s strategy,” he said. Not the tariffs causing panic. Just the president’s strategy, totally normal, nothing to see.
And it worked. The 10-year Treasury yield dropped from 4.80% to 3.90% in under three months. How? Investors fleeing stocks and piling into bonds. Flight to safety. When people get scared, they buy Treasuries. Bond prices go up. Yields go down.
Now look at who profits from that exact trade.
Howard Lutnick runs the Commerce Department. He leads Trump’s entire tariff and trade agenda. Before that, he was chairman and CEO of Cantor Fitzgerald, one of only 24 primary dealers that trade directly with the Federal Reserve. His firm is, in Bill Ackman’s words, “levered long fixed income.” When the stock market crashes, Cantor Fitzgerald wins.
Ackman – a hedge fund billionaire who supported Trump – publicly called out Lutnick’s conflict of interest. “He profits when our economy implodes,” Ackman said. “It’s a bad idea to pick a Secretary of Commerce whose firm is levered long fixed income.” Ackman said he’s “long America.” Lutnick, he argued, is “short America.”
But Cantor Fitzgerald’s bond position isn’t even the biggest piece. Since 2021, Cantor has managed the Treasury reserves for Tether, the world’s largest stablecoin. By 2025, Cantor held 99% of Tether’s Treasury holdings – over $113 billion in U.S. government bonds. Cantor also bought a 5% equity stake in Tether worth around $600 million. Lutnick went on CNBC and bragged about it: “I hold their Treasuries, and they have a lot of Treasuries.”
Tether, by the way, is under federal investigation for potential money laundering and sanctions evasion. But the Commerce Secretary vouches for them personally.
When Lutnick stepped down from Cantor Fitzgerald to join the administration, his son Brandon became chairman. Brandon previously interned at Tether’s offices in Lugano. The family stays in the game.
Then there’s Elon Musk. Bessent personally granted Musk’s DOGE team access to the Treasury’s federal payment system – the network that handles $5 trillion in annual payments, including Social Security, Medicare, tax refunds, and every federal contractor check. A career official named David Lebryk, who had overseen that system for 30 years, was placed on administrative leave after resisting Musk’s access. He retired days later.
Nineteen states have filed lawsuits against DOGE for allegedly accessing private data they had no business seeing. Senator Ron Wyden warned that “politically-motivated meddling risks severe damage to our country and the economy.”
What does DOGE do with access to every payment flowing through the federal government? We don’t know yet. But Musk’s companies, including SpaceX and Tesla, depend heavily on government contracts. And someone with that view of financial flows could front-run just about anything.
David Sacks completes the picture. Peter Thiel’s old PayPal mafia partner is Trump’s AI and Crypto Czar. Before taking the position, Sacks sold $200 million in crypto holdings. His venture firm, Craft Ventures, still holds stakes in crypto companies including Bitwise, which manages tokens in Trump’s proposed crypto reserve.
Sacks has been pushing stablecoin legislation with a very specific argument: stablecoins will “create potentially trillions of dollars of demand for U.S. treasuries.” Every stablecoin has to be backed by something, and if they’re backed by Treasuries, that’s artificial demand for bonds. Prices up. Yields down. Good for anyone long bonds.
Trump’s own family launched a stablecoin called USD1, backed by Treasuries and dollar deposits. Abu Dhabi’s MGX pledged $2 billion in USD1 to Binance – the largest crypto investment in history. Senator Elizabeth Warren called it an “explicit conflict of interest.”
The pattern is simple once you see it. Create crisis with tariffs. Drive investors into bonds. Profit on the positions you’ve already built. Then use stablecoin legislation to lock in permanent artificial demand for Treasuries, keeping yields low forever.
Bessent handles Treasury. Lutnick leads tariffs. Musk gets system access. Sacks writes the stablecoin rules. Each one has financial interests directly aligned with the manufactured crisis.
They’re not hiding it. They’re just betting you won’t understand how bonds work.
Now you do.
SOURCES:
https://en.wikipedia.org/wiki/Scott_Bessent
https://www.cnbc.com/2024/09/18/fed-cuts-rates-september-2024-.html
https://www.cbsnews.com/news/data-access-elon-musks-doge-us-treasury-lebryk/
https://www.cnn.com/2025/02/04/politics/treasury-payments-system-musk-doge-access
https://beincrypto.com/cantor-fitzgerald-partnership-new-era-tether/
https://finance.yahoo.com/news/cantor-fitzgeralds-tether-ties-raise-130000952.html
https://techxplore.com/news/2025-02-stablecoin-issuer-tether-profit-billion.html
https://fortune.com/2024/11/27/scott-bessent-treasury-george-soros/
https://www.washingtonpost.com/business/2025/01/31/elon-musk-treasury-department-payment-systems/