jakiro
source:Arthur Hayes, founder of BitMEX; compiled by: Bitchain Vision
It is no new that Buffalo Bill Bessent’s plan is to reindustrialize the United States and to try to stop Pax Americana from becoming a quasi-imperial to a pure power.The World War II emergency allowed the Treasury Department to take over the Federal Reserve between 1942 and 1951.Part of Becente’s job is to reshape the yield curve, that is, the yield curve control.How is the yield curve during that period compared to now?
The Federal Reserve limits short-term Treasury yields to 0.675%, and 10-year to 25-year Treasury yields to 2.5%.It can be seen that the current yield curve reflects both high short-term and long-term interest rates.The key difference, however, is that the yield curve in the past is much steeper than it is now.Before I discuss the benefits of the 1951 yield curve for all sectors of the U.S. economy, let usLet’s first learn how the Fed uses its existing tools for this yield curve control (YCC).
By loweringBank reserve interest rate (IORB)And the bank fromDiscount window (DW)The interest rate on borrowings to manipulate Treasury bond yields, and the Fed can keep short-term yields within its desired range.The Fed utilizesSystem Open Market Account (SOMA)Print money (such as creating bank reserves) and purchase bonds from banks to ensure that the yield does not exceed the agreed upper limit.The move expanded the Fed’s balance sheet.The current Fed toolbox can perfectly achieve the 1951-style yield curve.The question that this article will consider is how Trump and “Buffalo” Becente will achieve this level of market manipulation politically.
Before we discuss the political and bureaucratic rules governing the Federal Reserve, I would like to talk about the benefits of the 1951-shaped yield curve for all sectors of the economy.
The essence of the Buffalo Becente program is to transfer credit creation and the resulting economic growth from various non-bank financial institutions such as the Federal Reserve and private equity firms to small and medium-sized bank lenders (I call it regional banks).He recently published an op-ed in the Wall Street Journal, slamming the Fed and describing it in populist terms as placing the “Main Street” above “Wall Street.”Don’t worry too much about entering his economy “Valhalla” (Note: Valhalla, Nordic mythology word, Odin here to receive the souls of fallen soldiers) needs to use the undemocratic tool of the Federal Reserve printing money.Bescent is a double-faced secret official of the Treasury Department. This is proven by criticizing the “bad girl” Yellen’s policies before taking office, and after being crowned, he faithfully implemented them.
Regional banks need a steep yield curve if they want to create credit and make profits.The figure below shows that although overall interest rates were lower during the 1942-1951 period, the yield curve was much steeper, making lending to SMEs safer and more profitable.Small and medium-sized enterprises are the lifeblood of the US economy.Businesses with less than 500 full-time employees account for about 46% of the employed population.However, when the Fed became the primary issuer of credit, these small and medium-sized enterprises were unable to obtain loans because the printed currencies flowed to large corporations that could enter the institutional debt capital market.In addition, the yield curve is too flat or even inverted; therefore, regional banks are too risky to lend to these types of businesses.Articles between me (see the previously compiled and published by Bitlink Vision “If Trump’s “America First” plan succeeds, BTC will reach $1 million”) talked about this.I call Becente’s monetary policy “quantitative easing for the poor”.
Banks will now lend to real industries that can produce the weapons needed to prepare for another brilliant bombing century like Baghdad/Tehran/Gaza/Caracas (yes, Venezuelan regime change attempts will take place in 2028), bombs fill the center of the brown or Muslim population, and the U.S. military can bring democracy…assuming residents are still breathing:(.
This solves industrial problems.In order to appease American civilians who need expansionary welfare states in exchange for their allegiance, the government must raise funds at a more affordable price.By fixing the yield on long-term bonds, Becente can issue inferior Treasury bonds in unlimited quantities, while the Federal Reserve pays due diligence with printed dollars.Interest expenses fell sharply, and the federal deficit also decreased.
Ultimately, the value of the US dollar relative to other worthless fiat currencies and gold will collapse.This allows U.S. industry to export goods first to Europe at competitive prices and then to the global south, competing with China, Japan and Germany.
Conceptually speaking,The reason why Becente wants to control the Fed and implement the YCC is easy to understand, but the current Fed does not cooperate.Therefore, Trump must let his loyal fans join the Fed, these people will obey the will of “Buffalo Becente”, otherwise they will be hit by “get the hose” again (get the hose) (the police use fire hose to disperse the crowd, meaning humiliation or attack).Federal Reserve Director Lisa Cook is about to experience a “fire hose”-like blow in 2025.If you don’t know what that is, take a look at the strategies established by the establishment during the civil rights protests in the 1960s.
The Federal Reserve has two committees, control the policies required for the success of Becente’s plan.The Federal Reserve (FBOG) controls the IORB, and in turn controls the interest rate on DW loans.The Federal Reserve Open Market Committee (FOMC) controls SOMA.How do the voters of the two committees interact?How did these vote members emerge?How can Trump legally and quickly control these two committees?Speed is crucial because Trump’s Reds Republican Party will face fierce competition in the election with just over a year left before the 2026 midterm elections.If the Reds Republicans lose control of the Senate and Trump still hasn’t won’t win a majority on both committees by November 2026, the Blues Democrats will not confirm any future appointments.This article will answer these questions.I must remind you that when you conduct in-depth discussions in purely political fields, the risk of making mistakes is higher.Humans always do something strange and unpredictable.My goal is to point out a very likely path forward, and it is very likely that my portfolio only needs to hold Bitcoin, junk coins, physical gold bars and gold miners for a long time.
Getting started with the Federal Reserve
Understanding the bureaucratic decision-making process of the institutions responsible for printing money is an integral part of my investment framework.As I explore the global dirty fiat currency mechanism, I have learned a lot about how the various finance ministries and central banks operate.As complex adaptive systems filled with nodes of human decision makers, these bureaucracies must abide by “rules” to achieve any goal.Certain rules govern the non-elected bureaucracy (the Federal Reserve) responsible for U.S. monetary policy.So, I have to answer several questions to predict how the policy will succumb to the will of Trump and Buffalo Becent.
1. Who (which committees) vote on which parts of monetary policy?
2. How many votes are required for a motion to pass?
3. Who will choose different members of these boards?
4. When will the board members be replaced?
First, Trump must get four seats to get a majority in the seven-member Federal Reserve Board (FBOG).He can then use his majority in the FBOG to get seven votes in the twelve-man Federal Open Market Committee (FOMC) to earn a majority in the FOMC.I will explain the monetary policies that each agency can develop, member selection, and how Trump gains control by the end of the first half of 2026.
Let’s dive into the composition of FBOG.
Understand the Federal Reserve (FBOG)
The FBOG has seven directors, appointed by the president and approved by the Senate.Here is the list of current directors:
The Federal Reserve (FBOG) has two very important things in charge.First, the Council establishes IORB.Second, the Council votes to approve the nomination of the Federal Reserve regional bank presidents, who will take turns to vote for the Federal Open Market Committee (FOMC).
To effectively manipulate short-term interest rates, the Fed must set the IORB between the upper and lower limits of the federal funds rate determined by the FOMC.Therefore, when the Fed is coordinated internally, the FBOG and FOMC are able to work together, and the IORB is also within that range.But what if the FBOG supports Trump and believes that the monetary policy formulated by the FOMC is too strict?What measures can FBOG do to force FOMC to lower the federal funds rate?
FBOG can set the IORB rate well below the federal funds rate.This provides arbitrage opportunities for Fed member banks.These banks can provide collateral after the DW rate is lower, borrow funds at a lower DW rate, and lend at the SOFR rate.The Fed lost because it was actually printing money and then handing the money to the banks that made the arbitrage.To avoid being deceived by Jamie Dimon and others, the FOMC had to lower the federal funds rate to match the IORB rate, even if they were reluctant to do so, as most of the voting council members faced the TDS.
If Trump has a four-seat majority in the Federal Reserve (FBOG), he can force the Federal Open Market Committee FOMC to quickly lower interest rates to the level he hopes.How many directors are currently loyal to Trump?
As Jerome Powell’s Fed chair term ends in May 2026, some council members are trying to replace him.To show loyalty to Trump, they talked openly about what the Fed’s policy should be and, in some cases, objected to the majority’s decision at the Federal Open Market Committee (FOMC) meeting.At the July 2025 meeting, the two board members who disagree were Bowman and Waller.Trump has been half successful.
Surprisingly, Adriana Kugler suddenly resigned from the council this summer, and the Senate also confirmed the nomination for Trump’s nomination for Stephen Miran.Rumors say that Kugler’s husband traded securities during the Fed’s lockdown period; for readers without a political background, this behavior may be called insider trading, and he will be sent to prison once the Justice Department comes to investigate.Kugler resigned before being severely criticized by the Trump administration.After Kugler left, Milan took office, and there were three candidates in Trump’s camp, only one was missing.
Like everyone else, the Fed’s directors abuse their power.They conduct insider trading (see previous paragraph), while council member Cook is suspected of lying on a mortgage application.Federal Housing Finance Director Bill Pulte accused Cook of mortgage fraud and asked her to resign.But she insisted on her position and refused to resign.Poulte referred her case to the Department of Justice (DOJ), who head of Justice Pam Bondi is currently reviewing whether to prosecute a grand jury for bank fraud.The grand jury almost always agrees to indict the prosecution.The Justice Department can easily get approval for prosecution of Cook, so I can only imagine that the Justice Department is hesitant to use the threat of formal prosecution as a bargaining chip to force Cook to resign.I don’t know if she is guilty; the mainstream media you follow will determine whether you believe she is guilty.Becente allegedly violated some of the financial applications submitted to the bank.In the United States, everyone is a criminal, you know!Whether she is ultimately guilty or not, the Justice Department’s conviction rate is close to 100%, and Cook will be done if he doesn’t resign.I guess her stubbornness is purely a negotiating strategy to pass easily in high-paying academic positions in the administration or academic world offered by the Trump administration.No matter what, she will not be able to join the ranks of federal judges by early 2026.
Trump, with four votes in hand, could quickly limit Treasury yields as he instructed the Federal Reserve to abandon the IORB.Next, FBOG can liberate regional banks, free them from absurd regulation, and allow them to lend to small businesses in the real economy as Becente wishes.FBOG can do this because it handles regulatory issues (or lack of regulation) for commercial banks.The last puzzle is controlling the amount of money, which allows him to fix long-term yields at lower levels through SOMA.To do this, Trump needs to control the Federal Open Market Committee (FOMC).
So, how can the FBOG control the Federal Reserve get a seven-vote majority in the Federal Open Market Committee?
Federal Reserve Bank President
There are twelve banks in the Federal Reserve.In the era of more developed agriculture in the United States, different regions needed different interest rates, depending on the type of goods and services provided to the national economy throughout the year – so twelve regional banks were required.Each regional bank nominates a director who must obtain at least four votes from the Federal Reserve (FBOG) to enter the Federal Open Market Committee (FOMC).Only five of the twelve regional bank presidents have voting rights in the Federal Open Market Committee FOMC, and the Federal Reserve Bank president of New York has permanent voting rights.Therefore, four different regional bank presidents vote on the Federal Open Market Committee FOMC each year.In years ending with 1 or 5 each year, the governor of the regional bank is subject to re-election from the federal regional councils.A simple majority of each regional council’s Category B and C council members (four out of six) voted for a bank president.All presidents will accept re-elections in February next year.Except for New York, the relevant voting areas are as follows:
● Cleveland
● Minneapolis
● Dallas
● Philadelphia
Have you noticed the professional backgrounds of these council members?Most of them are financiers or industrialists.If the currency is more abundant and cheaper, their personal net worth will grow significantly.These people are also human beings, and people usually always act for their own interests without being restricted.I don’t know their political stance, but I believe that even if they have a total debt burden (TDS), the antidote to make themselves and their cronies rich is a cure for the higher asset price.That being said, if the Federal Reserve is known to only approve a chairperson who votes for a looser monetary policy on the Federal Open Market Committee (FOMC), the boards of banks in each region will take action in Trump and in their own interests.
If the regional council does not recommend dovish candidates for the FOMC seat, the Federal Reserve will reject them.Remember, Trump now has four out of seven votes.
Trump only needs four newly elected commissioners, three of whom are his loyal fans.In this way, he can get seven votes in the Federal Open Market Committee (FOMC), and most importantly, control SOMA, the Federal Reserve’s money printing machine.Then, Trump’s close friends at FOMC will print money and buy the mess debts that “Best” can’t find the buyer.Ladies and gentlemen, this is the Treasury-Feder Agreement in 2026.Both the money printing and YCC are perfect.Remember that in this dirty fiat financial system, the 4 and 7 that you get before the flop (in Texas Hold’em, it means that the hand consists of a four and a seven, and the suits of these two cards are different) are stronger than the pocket A (i.e., “a pair of A”.
But I know you all want to see my optimistic article on the future price of Bitcoin, assuming my money printing predictions come true.Please see below.
Mathematics in Bull Market
For those who doubt whether Trump really wants to print money to “revive” America’s dream of governing the world, here’s a brief look at history to see what prompts elite politicians to drive radical change.American elite politicians always use any means. Even if these behaviors are very unpopular, they must preserve the so-called fruits of the empire for the ruling class.The relationship between former African slave descendants and European immigrants is a good example and has always dominated American political and social discourse.It was during the bloodiest civil war in American history that President Lincoln liberation of slaves and severely damaged the Confederate economy.After the federal victory, they abandoned the newly freed humanity in the former Confederate states, subjecting them to Jim Crow (the law of the southern United States and border states to impose apartheid on people of color between 1876 and 1965), and the ruling elite did not reconsider formally extending suffrage and other civil rights to former slaves until 1965.The increase in the literacy rate of former slaves and the promotion of communism that promotes economic and civil equality across mankind attracted the lower black class.The problem is that the elites need poor blacks to fight the communist “Charlie” on the Indochina front, produce export goods at factories in northern China, do housework in wealthy families, and on farms in southern China, and certainly not on TV-based Washington, DC, demanding equal rights with others.American propaganda also needs to promote the image of American capitalism superior to Soviet communism to the non-aligned world.The Declaration of Independence explicitly states that “all people are born equal”, but police dogs roar at the little girls who went to schools that had just been desegregated. This is not a good thing.Therefore, Southern Democrat Linden Johnson (Note: The 36th President of the United States proposed the legislative measure of “Great Society” to promote policies to safeguard civil rights, federal health insurance, Medicare and other policies), became a group of civil rights defenders of niggers who had just emerged from the cotton picking era, which made many people in his class feel frustrated.Now, to start another war with the more united, prosperous, and more powerful Eurasia (Russia, India and Iran), the credit distribution must be completely changed.Therefore, I declared with confidence that these white people are not joking about printing money.
Trump and Becent believe their mission is to restore the United States’ global dominance.This requires rebuilding a solid manufacturing foundation and producing real goods rather than “services”.China also came to a similar conclusion in the face of the Sino-US trade war in 2018 initiated by Trump.China has crushed the animal spirit of financiers and CEOs of large tech companies and changed China’s economic direction.China’s best and smartest people will not build simple apartments and bicycle-sharing applications, but will conquer the green economy, rare earths, military drones, ballistic missiles, artificial intelligence, etc.After nearly a decade, China can independently produce all the real goods a nation-state needs to maintain its sovereignty in the 21st century without the help of the United States.
The point is, don’t doubt that the Trump team will do everything possible to print the currency needed for the U.S. transformation.That being said, allow me to imagine a little bit of self-indulgently how much credit the Fed and the commercial banking system will create by 2028.
From now until 2028, the U.S. Treasury Department must issue new debts to repay old debts and make up for the government deficit.I used Bloomberg’s “DDIS” feature to estimate the total amount of Treasury bonds due from now until 2028.Then I assume that by 2028, the federal deficit will reach $2 trillion a year.Therefore, I estimate that the issuance of US Treasury bonds will reach $15.32 trillion.
During the COVID-19 pandemic, the Fed used SOMA to purchase about 40% of the issued Treasury bonds, which increased the size of its balance sheet.I believe the Fed will buy 50% or more of the issued Treasury bonds because fewer foreign central banks will buy Treasury bonds today because they know Trump will issue a lot of Treasury bonds.
Estimating the growth of bank credit is not easy.The most reliable estimate is based on data during the COVID-19 pandemic.During the COVID-19 pandemic, Trump implemented quantitative easing policies against the poor.During this period, bank credit increased by $2.523 trillion, as evidenced by the Fed’s weekly increase in other bank deposits and liabilities.Trump has about three years to stimulate the market, which is equivalent to issuing $7.569 trillion in bank loans.
This has brought the total credit growth of the Federal Reserve and commercial banks to $15.229 trillion.The most puzzling part of this model is guessing how much Bitcoin will rise for every dollar of credit created.Again, I mean the COVID-19 pandemic.The slope of Bitcoin percentage growth with one dollar credit growth is about 0.19.Ladies and gentlemen, this leads to a 2028 Bitcoin price forecast of $3.4 million!
Do I think the price of Bitcoin will rise to $3.4 million by 2028?No, but I believe this number will be significantly higher than its current trading price of about $115,000.mineThe goal is to correctly judge the direction of travel and be sure that you are betting on the fastest horse, provided that Trump really intends to issue trillions of dollars to achieve his policy goals.That’s what this model does.
