Arthur Hayes has a message about crypto investors and Bitcoin (BTC) Hodler being obsessed with the US and China being obsessed with inch towards trade deals. You are looking at the wrong institution.
“The actual show is at the Treasury Department. Ignore the Fed. That’s not a problem,” Hayes told Corndesk in a recent interview. “Powell wasn’t an issue under a democratic administration in 2022, and now it’s not an issue under Republicans.”
For Hayes, the Federal Reserve became a sideshow. He argues that the pull of the real financial lever is happening under Treasury Secretary Scott Bescent.
The liquidity flood combined with the US inability to contain spending, Hayes says Bitcoin is heading towards $1 million by 2028.
“What we care about is whether today’s system has more dollars than yesterday,” Hayes said. “That’s all that matters.”
But in his view, monetary policy is not the only catalyst. Hayes believes geopolitics is fueling fires. Particularly performance trade diplomacy between the US and China. As both sides take a stance, Hayes says he is likely to sign a deal that looks bold on paper but doesn’t change anything in the material.
“It’s going to be a superficial deal,” he said. “Trump needs to prove he’s tough in China. XI needs to prove he’s up against white people.”
After all, China is proven by its Covid-era policy, which allows it to withstand more economic pain. Because tariffs are politically dangerous, Hayes believes the next move is to tax foreign investments. This is a quiet form of capital management to reduce dependence on American foreign buyers without smoking domestic voters. This is a way to engulf Americans in trade reorganization.
“The only real policy that actually works is capital control,” he said.
Potentially, the table has multiple tools. More aggressive ideas such as foreign Treasury and taxes on stocks as well as mandatory bond swaps, 100-year paper 10-year memo transactions, or withholding taxes for capital gains from US assets.
This is all part of a strategy to recalibrate financial accounts without forcing Americans to “buy less.” He’s a message that politicians won’t sell.
“Americans don’t want to do anything difficult,” he added. “They don’t want to be told you have to consume less.”
China, on the other hand, doesn’t go anywhere. Hayes says that even if he pretends not, he has no choice but to continue buying US assets.
The story continues