Buffalo Bill Bessent’s plan to reindustrialize America and attempt to prevent Pax Americana from gradually transforming from a quasi-empire to merely a powerful nation is nothing new. The urgency of World War II allowed the Treasury to take control of the Federal Reserve from 1942 to 1951. Part of Bessent’s plan is to reshape the yield curve, also known as yield curve control. How did the yield curve during that period compare to now?
The Fed capped Treasury bills (T-bills) yields at 0.675% and capped 10- to 25-year bond yields at 2.5%.1 As you can see, the current yield curve simultaneously features high short-term and long-term interest rates. However, the key difference between the two is that the past yield curve was much steeper than today’s. Before I discuss the benefits of a 1951-style yield curve to various sectors of the American economy, let’s first understand how the Fed can use its current tools to implement this form of yield curve control (YCC).
By lowering the interest rate on bank reserves (IORB) and the rate at which banks borrow from the discount window (DW), the Fed can control short-term yields to where it wishes them to be. By leveraging the System Open Market Account (SOMA) to print money (such as creating bank reserves) and purchasing bonds from banks, the Fed ensures yields don’t exceed the agreed-upon ceiling.2 This action expands the Fed’s balance sheet. The Fed’s current toolkit can perfectly implement a 1951-style yield curve. The question this article will explore is how Trump and Buffalo Bill Bessent can achieve such a degree of market manipulation.
Before diving into the politics and bureaucratic rules governing the Fed, I want to discuss the benefits of a 1951-style yield curve to various economic sectors.
Buffalo Bill’s plan’s core is to shift credit creation and the resultant economic growth from the grip of the Federal Reserve and various non-bank financial institutions like private equity firms to the hands of small and mid-sized business bank lenders (what I call regional banks). In a recent Wall Street Journal op-ed critical of the Fed, he describes with populist language the vision of elevating Main St. above Wall St. Don’t get too hung up on the fact that the conditions for entering his economic paradise require using the Fed’s undemocratic money-printing tool. Bessent’s duplicitous face at the Treasury is also reflected in his pre-appointment criticism of “bad girl” Yellen’s policies and his faithful execution of the same policies after taking office.
For regional banks to profitably create credit, they need a steep yield curve. The chart below shows that during the 1942-1951 period, despite lower overall interest rates, the yield curve was steeper, making lending to small and medium-sized enterprises safer and more profitable. Small and medium-sized enterprises are the lifeblood of the American economy. Businesses with fewer than 500 employees account for approximately 46% of employment. However, when the Fed is the primary credit issuer, these SMEs cannot access loans because the money the Fed prints flows to large corporations, which have access to institutional debt capital markets. Furthermore, if the yield curve is not inverted, it’s too flat, making it too risky for regional banks to lend to these types of enterprises. My article “Black or White” once discussed this issue. I call Bessent’s monetary policy “QE 4 Poor People.”
Banks will now extend loans to the real economy—entities capable of producing weapons needed for regions like Baghdad/Tehran/Gaza/Caracas (yes, there will be an attempted regime change against Venezuela by 2028), fill in your brown or Muslim population centers, and now the American military can bring democracy™… assuming the local inhabitants are still alive :(.
This addresses the industrial side of the equation. To appease American civilians who need to exchange loyalty for an ever-expanding welfare state, the government must finance at lower cost. By setting yields on long-term bonds, Bessent can issue unlimited quantities of “shit-tier Treasury bonds” while the Fed purchases these bonds with printed dollars. Interest payments and the federal deficit will both decline significantly.
🔴Finally, the value of the dollar relative to other dirty fiat currencies and gold collapses. This enables American industry to first export goods at competitive prices to Europe, then export globally to the Global South in competition with China.
Conceptually, it’s easy to understand why Bessent wants to control the Fed and implement yield curve control (YCC), but the current Fed is uncooperative. Therefore, Trump must fill Fed positions with his loyal supporters, who will obey “Buffalo Bill’s” will or face “firehose”-style pressure again. Federal Reserve Governor Lisa Cook is about to experience the 2025 version of “firehose” treatment. If you don’t know what that means, look at the tactics used by entrenched interests during the civil rights movement of the 1960s.
The Fed has two committees responsible for controlling the various policies needed to implement Bessent’s plan. The Federal Reserve Board (FBOG) controls the interest rate on bank reserves (IORB) and by extension the lending rates of depository institutions. The Federal Open Market Committee (FOMC) controls the System Open Market Account (SOMA). How do the voting members of these two committees interact with each other? How are these voting members selected? How can Trump legally and rapidly seize control of both committees? Time is key, because the 2026 midterm elections are more than a year away, and Trump’s Republican “red team” will face fierce competition at the ballot box. If the red team loses control of the Senate and Trump has not secured a voting majority in both committees by November 2026, the blue team Democrats will not confirm any of his future appointments. This article will answer these questions. I must remind everyone that when delving into purely political terrain, the risk of being wrong increases. Human behavior is often strange and unpredictable. My objective is to point out a very likely path forward, and “very likely” is sufficient for me to continue holding substantial amounts of Bitcoin, altcoins, physical gold, and gold mining stocks.
A Primer on the Federal Reserve Board
Understanding the bureaucratic decision-making processes of the institution responsible for printing money is an important component of my investment framework. In my educational journey to understand how the global dirty fiat currency system operates, I’ve learned how various fiscal departments and central banks function. As complex adaptive systems composed of human decision-makers, these bureaucracies must follow “rules” to accomplish anything. Certain rules govern the unelected bureaucracy (the Federal Reserve) responsible for U.S. monetary policy. Therefore, I must answer several questions to predict how this policy will bend to the will of Trump and Buffalo Bill Bessent.
- Who and which specific committees vote on which parts of monetary policy?
- How many affirmative votes are needed to pass a motion?
- Who selects the members of each committee?
- When do committee members change?
First, Trump must secure four of seven seats to gain a majority on the FBOG. He can then leverage the FBOG majority to secure seven voting seats on the twelve-member Federal Open Market Committee (FOMC) for a majority. I will explain the monetary policy each institution can implement, how members are selected, and how Trump can seize control before the first half of 2026 ends.
Let’s explore the composition of the FBOG.
FBOG Explained
Seven members are appointed by the President and confirmed by the Senate to serve on the FBOG. Here is a list of current board members:
The FBOG has power over two very important things. First, the committee sets IORB. Second, the committee votes to approve nominees for Federal Reserve District Bank Presidents, who rotate into voting seats on the FOMC.
For the Fed to effectively manipulate short-term interest rates, it must set IORB within the upper and lower bounds of the federal funds rate determined by the FOMC. Therefore, when aligned within the organization, the FBOG and FOMC cooperate, and IORB falls within that range. But if the FBOG backs Trump and believes the monetary policy set by the FOMC is too restrictive, does the FBOG have a way to force the FOMC to lower the federal funds rate?
The FBOG can set IORB much lower than the federal funds rate. This creates an arbitrage opportunity for the Fed’s member banks. These banks can submit collateral to the DW (depository institutions), which carries rates that track the lower IORB level, borrow at the lower DW rate, and lend at the SOFR rate.3 The loser is the Fed, because it’s essentially printing money and handing it to banks engaging in arbitrage. To avoid being exploited further by Jamie Dimon and others, the FOMC must lower the federal funds rate to align with the lower IORB level, even if they’re unwilling to do so because most voting members suffer from TDS.4
If Trump controls four seats on the FBOG, he can force the FOMC to quickly lower rates to the levels he desires. How many current board members are loyal to Trump?
Since Powell’s tenure as Fed Chair will end in May 2026, certain board members are attempting to replace him. To demonstrate their loyalty to Trump, they publicly discuss what Fed policy should be, and in some cases vote against the majority at FOMC meetings. Two board members who voted against the majority at the July 2025 meeting were Barr and Waller.5 Trump is already halfway there.
Surprisingly, Adriana Kugler suddenly resigned from the board this summer, and the Senate has confirmed Stephen Miran, nominated by Trump. Street rumors circulated that Kugler’s husband conducted securities trading during the Fed’s “blackout period”; for readers without political background, such behavior might be called insider trading, which can carry direct jail time once the U.S. Department of Justice comes calling.6 Kugler resigned before being “humiliated” by the Trump administration. With Kugler gone and Miran taking office, Trump’s camp has three members, just one more needed to complete the majority.
Like all humans, Fed officials abuse their power. They engage in insider trading (see previous paragraph), and in the case of board member Lisa Cook, she allegedly lied on a mortgage application. Federal Housing Finance Agency Director Bill Poole accused Cook of mortgage fraud and demanded her resignation. She stood firm and refused to resign. Poole referred her case to the Department of Justice (DOJ), and DOJ head Pam Bond is currently reviewing whether to bring formal criminal charges of bank fraud against Cook. Grand juries almost always agree to prosecutions. It would be a walk in the park for the DOJ to get permission to prosecute Cook, so I can only imagine the DOJ is hesitating on whether to prosecute as a way of using the threat of formal charges as leverage to force Cook to resign. I don’t know whether she’s actually guilty, but whatever mainstream media you follow will determine whether you believe her guilty or innocent. It’s also been said that Buffalo Bill Bessent has some irregularities in financial applications at certain banks. In America, everyone’s a criminal, you know! Whether or not she ultimately proves guilty, the DOJ’s conviction rate hovers near 100%, and if she doesn’t resign, she will be prosecuted. I imagine her stubbornness is merely to secure some well-compensated academic position that the Trump administration will offer as a gentle, comfortable landing spot. In any case, she won’t be serving on the Federal Reserve board anymore by early 2026. Damn, that’s a bad omen!
🔴Trump holds four votes and can quickly suppress Treasury bill yields by instructing the FBOG to lower IORB. Next, the FBOG can lift ridiculous regulations on regional banks, allowing them to extend credit to small businesses on Main St., just as Bessent hopes. The FBOG can do this when dealing with regulation or lack thereof for commercial banks. The final piece of the puzzle is gaining control over the money supply, which enables him to dramatically compress long-term yields through SOMA. To achieve this, Trump needs to control the FOMC.
So, how does controlling the FBOG translate to securing seven voting seats on the FOMC?
Federal Reserve District Bank Presidents
There are twelve Federal Reserve District Banks. In America’s more agricultural past, different regions required different interest rates depending on the types of goods and services the national economy needed to provide throughout the year—hence the establishment of twelve district banks. Each district bank nominates a President, who must secure at least four affirmative votes from the Federal Open Market Committee (FOMC) to serve as an FOMC member. Among the twelve district bank presidents, only five are voting members of the FOMC, with the President of the Federal Reserve Bank of New York holding a permanent voting seat. Therefore, each year four different district bank presidents participate in FOMC voting. In years ending in 1 or 5, district bank presidents must be re-elected by the board of directors of their respective Federal Reserve Districts. Each district board’s Class B and Class C members (four of six people) elect a bank president by simple majority vote. The following February, all presidents will face re-election. The voting districts in question and the New York District are:
- Cleveland
- Minneapolis
- Dallas
- Philadelphia
Do you notice anything distinctive about the professional backgrounds of these board members? Most are financiers or industrialists. If money becomes more abundant and cheaper, their personal wealth will increase substantially. These people are also ordinary humans who, typically without constraints, always prioritize self-interest. I’m unclear about their political leanings, but I’m confident that even if they’re affected by TDS, the wealth created by higher asset prices would cure that condition. That said, if district banks know the FBOG will only approve dove candidates for FOMC seats, then every regional bank’s board will act for Trump and their own interests.
If district committees don’t nominate dove candidates for FOMC seats, the FBOG will reject them. Remember, Trump now holds the controlling four of seven seats.
Trump only needs three of the four new voting committee members to be loyalists. This gives him seven votes on the FOMC and, crucially, control of SOMA—the Fed’s money-printing machine. Then Trump’s followers on the FOMC can print money to purchase the massive amounts of shit-tier debt that Buffalo Bill Bessent can’t find buyers for. And there you have it, ladies and gentlemen, that’s the 2026 Treasury-Fed Accord. Comes with money printing and yield curve control included. Remember, in this dirty fiat financial system, four of seven is a stronger non-flush hand than pocket rockets.
But I know you’re all waiting for me to publish a blog post about Bitcoin’s future price, assuming my hyperinflation prediction comes true. Let me show you.
Bull Market Math
For those skeptical whether Trump is truly committed to printing money to “revive” the dream of Pax Americana, here’s a short history lesson on what drives elites to pursue radical change. American elites have always stopped at nothing, regardless of cost, to preserve the fruits of empire to secure the ruling class's interests. The relationship between descendants of formerly enslaved Africans and European immigrants is a perfect example, and this issue continues to dominate American political and social discourse. The Civil War, the bloodiest war in American history, saw President Lincoln destroy the Southern Confederacy’s economy by emancipating enslaved people. After the Civil War ended, the Northern victors abandoned the newly freed people to Jim Crow segregation in former Confederate states, while ruling elites formally reconsidered extending voting rights and other civic rights to formerly enslaved people, not acting until 1965. Rising literacy among formerly enslaved populations and the economic and civic equality promoted by communism attracted the lower strata within the Black population. The problem was that elites needed these poor Black bodies fighting communism “Charlie” on the Indochina front, producing exportable goods in Northern factories, doing housework for wealthy families, and working Southern farms, yet they were marching on televised parades in Washington, D.C., demanding the same rights as everyone else. America’s propaganda also needed to show unaligned nations that American capitalism was better than Soviet communism. When the nation’s Declaration of Independence proclaimed “all men are created equal,” but police sicked dogs on little girls heading to newly desegregated schools, this clearly wasn’t a good look. Therefore, a Southern Democrat, Lyndon B. Johnson, became an advocate for civil rights for a people whose ancestors were picking cotton just a few generations prior, infuriating many of his colleagues. Today, another war against a more unified, prosperous, and militarily powerful Eurasian continent (Russia, China, India, and Iran) requires major adjustments in credit allocation. Therefore, I declare with supreme confidence that these white supremacists are not playing games when it comes to money printing.
Trump and "Buffalo Bill" Bessent believe their mission is to restore American dominance globally. This requires rebuilding a solid manufacturing base to produce real goods, not "services." When Trump initiated the 2018 U.S.-China trade war, Chinese President Xi Jinping reached a similar conclusion. He suppressed the speculative instincts of financiers and Big Tech CEOs to redirect China’s economic trajectory. Who would have thought Alibaba CEO Jack Ma would be invited to Zhongnanhai for tea and serve time in a rich man’s prison? In Xi's China, the nation's best talents no longer devote themselves to building substandard apartments and bike-sharing apps but instead conquer green energy, rare earth elements, military drones, ballistic missiles, artificial intelligence and other sectors. After nearly a decade of development, China can now indigenously produce all the real goods a nation needs to maintain sovereignty in the 21st century without American assistance.
The point is, don’t doubt that Trump’s team will go to any lengths to print the capital needed for America’s transformation. Speaking of which, let me indulge in a bit of financial self-gratification and imagine how much credit the Fed and the commercial banking system will create by 2028.
From now until 2028, the Treasury must issue new debt to repay old debt and finance the government deficit. I used Bloomberg’s DDIS function to estimate the total amount of Treasury debt maturing from now through 2028. I then assumed the federal deficit will reach 15.32 trillion.
During the pandemic, the Fed purchased approximately 40% of Treasury debt through SOMA, which expanded the balance sheet. I believe the Fed will purchase 50% or more of the debt, because now even fewer foreign central banks will purchase Treasuries, knowing Trump will issue massive amounts of debt.
Estimating bank credit growth is difficult. The most defensible estimation method is using the pandemic period as a reference. During the pandemic, Trump implemented quantitative easing for poor people. According to bank deposits and liabilities reported weekly by the Fed, bank credit growth increased by 7,569 billion in bank loan originations.
This brings total credit growth from the Fed plus commercial banks to 3.4 million!
Do I think Bitcoin will reach 115,000. My objective is to grasp the correct directional trend and be confident I’m betting on the fastest horse, assuming Trump is serious about printing trillions to implement his policy objectives. This model does exactly that.
Footnotes
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Treasury bills have maturities of one year or less. ↩
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Why can we say the Fed “controls the ceiling on yields”? Bond prices and yields move inversely: Fed buys bonds without limit → bond prices rise → yields fall. If the Fed commits to buying at a certain interest rate level (say 2%) as a ceiling, once market interest rates (yields) exceed 2%, the Fed buys, pushing yields down. Market participants knowing the Fed has “unlimited firepower” won’t push rates above the ceiling. This operation is similar to Yield Curve Control (YCC), which the Bank of Japan used long-term and which the Fed employed after WWII. ↩
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This article cannot detail how the DW rate matches IORB in detail. The DW collateral rate is determined by the presidents of each Federal Reserve District Bank. The FBOG controls who holds that position because it approves presidents after district bank board nominations. SOFR stands for Secured Overnight Funding Rate; it is the replacement for the London Interbank Offered Rate (LIBOR). ↩
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Jamie Dimon is the CEO of JPMorgan Chase and one of the most powerful bankers in the empire. TDS stands for Trump Derangement Syndrome. You know someone has TDS if they oppose a policy merely because Trump supports it, even if they would normally support the policy. ↩
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However, at the most recent September FOMC meeting, Barr and Waller did not dissent like Miran on a larger 0.50% rate cut, but analysts believe Barr and Waller achieved what they wanted in lower neutral rate dots and dovish forward guidance. ↩
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These are completely baseless allegations with no evidence beyond speculation spread via email. ↩