➡ The Genius Act, a bill in America, is seen as a way to regulate stable coins, but it might have a deeper purpose. It could allow the government to convert $3.5 trillion in sterilized reserves into digital, spendable cash, bypassing the Federal Reserve. This could help finance strategic competition and stimulate growth, but it could also lead to inflation. The government might use stable coins to turn these reserves into digital cash, which could then be spent in the economy, potentially causing prices to rise.

➡ The article discusses the idea of using Bitcoin as a ‘relief valve’ to absorb excess global liquidity without driving up the prices of goods, services, and other assets. It suggests that as Bitcoin’s value increases, it can absorb more money that would otherwise inflate the prices of assets like houses or stocks. The article also mentions the growing interest in Bitcoin and stablecoins from influential figures and companies, suggesting they may see potential in this strategy. Finally, it hints at a future video discussing a predicted Bitcoin price of $3.7 trillion based on its correlation with stablecoins.

Trump just signed a 3.7 trillion dollar stablecoin plan that literally depends on Bitcoin exploding higher. But here’s what nobody’s telling you. This isn’t hopeful speculation. This is a mathematical reason why the government now needs Bitcoin to hit prices. That sounds impossible today. Now, if you don’t understand this connection, you’re going to miss the biggest wealth transfer in Bitcoin’s history. Because when the Treasury Secretary publicly projects these numbers, it’s not a prediction. That’s policy. I’ve been building and selling tech companies for decades. I’m a partner at a leading Bitcoin venture fund, an officer of a publicly traded Bitcoin company.

And this is the same strategies, the same intelligence that we use internally. And now you can too. So let’s go. All right, we are jumping right in. And like always, we’re going to go right to the source to hear exactly what they said, because this is the confession. All right. Like I said earlier, this is not a prediction by these guys. It’s policy. They’re the ones that determine the future outcomes. We go listen to what they say, and I’m not here to give you the news. You can go watch it on your own.

I’m here to tell you what this all means. Okay. So the confessions, first of all, we want to listen to Scott Besant. Why? Well, he’s the head of the US Treasury. He’s the person that’s responsible to sell the US debt to the world. That’s his job. Sell the debt. So he knows something about the policy. Well, let’s go ahead and just listen to a video clip of him right off the bat. And let’s hear exactly what he has to say, and I’ll break it down. Roll the clip. There is the growth, the potential growth of the debt.

But what’s more important is that we grow the economy faster. So what we’ve seen under the past four years, and what we inherited, I inherited 6.7% deficit to GDP, which was the highest deficit when we were not at war, not in a recession. So we’ve been trying to bring down the spending, and we are going to grow the revenue side. So we are going to grow the GDP faster than the debt grows. And that will stabilize the debt to GDP, which even Secretary Yellen and I agree is the most important number.

All right. So you heard it directly from Besant himself. So we have a problem. We have debt, and we have GDP. It’s a ratio. So we have debt growing super fast, and so the debt to GDP is going too high. Problematic. Now, originally they thought maybe they could bring the debt part down. Doesn’t seem like it’s likely. So now we must move the GDP up. That’s what he’s talking about when we’re saying grow our way out of this. All right. What about Musk? Elon Musk, you remember, he joined the Trump administration, fired up, he started doge, and he’s going to save a trillion dollars out of the budget.

You remember all of that. So he tried, he tried, he tried, he got attacked. People hated him for it, and he quit. And when he quit, he tweeted, he said, right here, I have come to the perhaps obvious conclusion. So I’ve quit. I should have known this all along. I was naive. I thought I could change the world. But the obvious conclusion is that accelerating GDP growth is essential. Saying the same thing. We can’t reduce the deficit. We can’t reduce the debt. We can’t reduce our spending. The only hope we have is growth to grow our way out of it.

You hear they’re saying the same thing. The people inside the government have decided there is no austerity. There is no budget. There is no cutting. And now the only way forward is much, much higher. Okay. Now, what does that mean? Well, there’s, there’s a lot. I’m going to break it down for you. Number one must says only radical improvements in productivity can save our country. Why is that? Well, in order to grow GDP, they’re going to have to let inflation let the money printer run hot. The problem is when the money supply expands faster than productivity, we get inflation.

So we need productivity to accelerate. Also one thing must talks about is the problem with aging demographics, declining population. That’s a whole other topic, but we need radical productivity. Of course, that’s what Trump is working on. All right. Now again, these are confessions of the playbook. They’re telling us what is coming next. They’re, they’re telegraphing this. We just have to understand this. We can position ourselves accordingly. The U S government is trapped in a debt spiral. All right. The debt spiral is that again, the debt is growing faster than the productivity.

Here we have a chart. This is from the government itself. And it’s showing where the debt to GDP ratio is and where it’s projected to end up depending on what happens with certain scenarios. So this is 150, 156% debt to GDP. This is a much higher. We don’t know. This is about 200% debt to GDP. Houston, we got a problem. We got to figure this out. And so understanding that we are in that debt problem, the only way through, the only way to escape it is with inflation, which is a bad word. It’s a dirty word.

You certainly don’t want that inflation. So what are we going to do about that? Let’s take a look. Okay. Then the warning that nobody’s paying attention to. Now the warning came from the BIS. The BIS is the bank of international settlements. This is the central bank of the central banks. When they make warnings, sometimes you might want to pay attention. Maybe we don’t listen to everything they say, but when they’ve made other warnings, like for example, before 2008, they knew what they were talking about. So what did they say? Well, they put out the message again, the warning.

And it said right here that the problem is the relentless rise in debt. Governments need to curb the relentless rise in debt. It said governments have a narrow window. Like if you don’t get this fixed right now, serious problem. Governments have a narrow window to put their fiscal house in order, bring the fiscal spending down or get that in under control somehow. The BIS says fiscal dominance could lead to rising inflation. Duh. When the governments keep increasing the debt and spending the money in economy, it’s going to lead to more inflation, obviously.

Now we know that all the charts are screaming the same thing. So we heard from the BIS. That’s their take. That’s their opinion. But let’s go look at the data ourselves. I like to look at the data. Here we have a tweet here from Luke Grauman. He says, the market has downgraded US debt to emerging market status. So the US used to have the best credit in the world because of course, we have the money printer. We can print dollars. Emerging markets are like Peru or Turkey or Lebanon. And so now they’ve downgraded US debt to that level.

And it says here that higher reals, real rates, are mathematically certain to push the sovereign into a debt spiral. What does that mean? That means if the government is paying positive rates. So what they’re doing is they’re paying negative real rates. And what we can see is real rates versus gold. Real rates are going down. Why gold is going higher? That’s the data. What does that mean? Let me show you a couple more charts and start making sense. This is gold priced in US Treasuries. All right. So everything’s a trade.

We’re pricing GLD in TLT. And what does this show us? Since about 2015, look at the price of gold as compared to US Treasuries. Third plunging, gold is going higher. Okay. Well, what about Bitcoin? Same thing. Bitcoin and US Treasuries is showing us the same thing since about, I mean, since Bitcoin has basically come out and it’s been basically a straight line up. And again, we can see the markets, the charts, they’re screaming the exact same thing. There is a debt crisis that can’t be solved. The only way to solve this problem is massive amounts of more debt and massive amounts of more printing to the point at which holding those assets will only lose money.

So everyone’s jumping ship. We can see that gold is gaining confidence and also investors are gaining confidence in Bitcoin. Okay. Now the BI’s didn’t tell you that there’s a plan. That’s what percent, that’s what Trump, that’s what Musk, that’s what they’re telling us. Again, this is not a prediction. There’s a policy. So don’t worry. There’s a plan. And if you know what the plan is, then you can just position accordingly. Okay. What are we talking about? So we have the genius act. Okay. If you’ve been paying attention, you don’t have to be a genius.

You saw it, right? I know, corny joke. Okay. The genius act is a bill that just got signed in. Trump just signed it. And it’s basically what the media is portraying to be is a stable coin bill. So this gives us clear guidance on what stable coin regulation could be, as if we need that, because stable coins have been around for a long time. In America, the land of the free, we’re free to do things. Laws tell us what we cannot do. So overall, I’m not super happy with this bill because it sort of gives us guidance as if we needed the government to tell us it’s okay to do something.

All right, let’s put that aside. So basically the genius act, again, everyone’s looking at as stable coin regulation. I think there’s something else to it. It’s not really what it appears to be at the service level. And you have to sort of understand the entire picture to start picking this apart, as well as look at some of the other executive orders that Trump has put into place. I’ve covered them in other videos. What am I talking about? Well, again, beneath the surface, there appears to be more. Going back to Luke Grauman, one of my favorite analysts to follow, you should definitely check him out.

We’ll link to his Twitter feed and his newsletter down below. It’s worth checking out. So what Luke Grauman says here regarding this genius act is that now the government could turn $3.5 trillion, not a small amount, $3.5 trillion in sterilized reserves into digital, spendable cash. I’m going to tell you what that means in a second. And they can circumvent the Fed. So if you’ve been paying attention, Trump has been fighting with Jerome Powell, the chair of the Federal Reserve. He’s calling him too late. He’s calling him always behind. He’s trying to basically get him to resign.

He won’t. They’re drumming up these charges that they’re mismanaging a renovation at the Fed. Maybe they can get him out over that. Either way, whether Trump gets him out, whether Trump elects somebody else to sort of circumvent what he’s doing, or we wait until he has to resign next year and Trump replaces him anyway. So either way, this is a way for the Trump administration to sort of get around or bypass what Jerome Powell and the Fed is doing. Now, this is a way that they could help finance a great strategic competition that the US is presently losing badly.

That’s perfect. Okay. So what we’re talking about is we need to allow G growth to grow up much faster and repress bondholders, meaning the bondholders, the people that are holding the government debt, holding the bag, they get repressed, meaning they don’t make enough money for the amount of inflation that we’re having. I put down here, this guy says, yeah, but why would that happen? The government’s not going to do anything like that. And Luke says, you’re assuming the US government is doing anything over the past decade to actually help consumers.

I disagree. So they’re not helping the consumers. They’re trying to help themselves, is what Luke says. In his opinion, this is about ramping up growth and receipts. Again, putting the money in the system, what money? The 3.5 trillion in sterilized reserves. I’m going to break that down in a second. Putting that 3.5 trillion in, why? To ramp up the spending, ramp up the growth and receipts and financial repression for the government holding those bondholders or the bagholders down. So what are we talking about? We’re talking about sterilized reserves. What we’re talking about is that the federal reserve has given the banks a bunch of money, but they don’t want the money to get into the economy because it would cause massive inflation.

If you dump all this money into the economy and people go start spending it on vacations and trips and cars going out to eat and things like that, the prices will rise. So what they’ve done is they paid the banks to leave it there, keep it out of circulation. That’s why it’s called sterilized. And so they pay the banks to hold it there and you can see that the amount of money sitting there was flat until the 2008 great financial crash. And since that time, it has completely ballooned to about 3.5 trillion dollars today.

It’s just sitting there. That could just go into the economy. It could buy U.S. Treasuries, percent’s main job. But instead, it’s sitting there. And what if the Treasury Secretary could get them to buy Treasuries? What if the Trump administration could get that money back into the economy and we could see inflation to start growing our way out of this? Are you starting to see the picture? Now, you might be asking, hmm, well, if we got the 3.5 trillion of reserves out and that’s digital spendable cash that gets right into the ecosystem, not like traditional quantitative easing because quantitative easing gave money to the banks.

That’s why it’s sitting there. We get to the public, but you might say, but Mark, isn’t that highly inflationary? Well, you’d be right. So, what do we have to think about that? I’m going to answer that for you, but first, let’s just think about this 3.5 trillion dollar secret for just a second, except how sneaky this is. Because again, as I said, it bypasses what the Federal Reserve can do. It bypasses them completely, kind of cuts them out. It takes those sterilized reserves and could push them in to be circulating money.

We take the traditional quantitative easing that gave money to the banks, but never made it to the public. We take that and we use that to create the inflation. And it’s the stable coin that enables all of that. How is that? How is it happening? Well, stable coins can turn dead money into digital cash. So, remember, the 3.5 trillion is sitting there because it can’t be spent into the economy, right? So, the Fed pays them what’s called interest on reserves, IOR, to sit there. They make about 4.5%. But what if the banks could now issue stable coins for the reserves they had? They still have the dollars.

The tokens now become claims to the dollar they have. And potentially, those dollars they have could still be earning interest, and they have the stable coins out there at the same time, proverbially having your cake and eat them at the same time, if you will. But while we see this, again, they’re telling us this, they’re projecting this, they’re giving us the policy. We can see Scott Besant right here. Again, put this on X. Amazing what we have today where the President of the United States or the Secretary of Treasury are literally like putting content, putting out messaging directly to you and I with no middleman.

Pretty amazing. So, here on X, he said that recent reporting projects that stable coins could grow into a 3.7 trillion dollar market by the end of the decade. 3.7. Not too far off from the amount of sterile reserves are there. A thriving stable coin ecosystem will drive demand from the private sector for US Treasuries, which back stable coins. So, he’s trying to sell Treasuries. He would love it if everybody in the world would buy Treasuries. Not just banks, institutions, but everybody by buying stable coins and the stable coin companies, then by the Treasuries.

All right, so this is exactly what the plan is. This is the policy they’re telling us all over. But what didn’t he say publicly? What is missing from this? Well, what they’re not telling you directly, but again, there’s a plan, is that this inflation is a trap. Or I should say the trap is the inflation. Because if they take some of that money or all that money and dump it into the public, it’s going to push asset prices higher. If you take 3.5 trillion of new money and you put it into circulation, everyone goes out and starts buying things and traveling and buying and shopping and Amazon and whatever, all those things.

This is why Musk, again, going back to him said, there must be, to match that, there must be a radical improvement in productivity. If not, the inflation is going to rage. So, that’s the dilemma. The dilemma is that we need to increase efficiency, but the problem is we can’t do it right away. Here’s going back to Musk on that same Twitter thread I referenced earlier, where he said the only way is to grow our way out of it. Down here, they said, well, how soon can humanoid robots have an actual effect on GDP of any country? How long is that going to take? Because, of course, he’s working on robotics.

And he says four to five years. So, the problem is we need this money in the economy right now, like right now. But the problem is if we do that, we’re going to have massive inflation unless we get the efficiency up. But we can’t really get the efficiency up for four to five years to rebuild supply chains and build the automation and get the robots. So, what do we do in the meantime? Because if inflation starts raging higher, home prices go up and stock prices go up, and all the cost of goods and services go up, people are going to be unhappy.

We’re going to have another election. It’s not going to work really good. So, we need growth now, but we don’t want the inflation. That’s the dilemma. We need an escape valve. Where could this release valve? Where could all that inflation go? So, all that growth go where it doesn’t affect prices. We need it to absorb trillions, but where could that valve go? Where could it absorb trillions but without competing for goods and services? Because when we compete for goods and services, it drives the price up. You’re starting to see the problem. Well, here we go.

All right. The escape valve theory. So, again, financial repression. This is not a new concept, right? The IMF has written a white paper on this exact concept. They’ve done it in the 40s. They’re doing it again and again. So, you buy the debt, use the stablecoin. The stablecoin buys the debt, whatever, and then we pay below market yields, and we let inflation run hot, and we steal the middle. We inflate away the middle. This is negative yields, okay? That’s the escape valve, and then we need assets to go way higher. So, even though this inflation is going higher, and even though all the cost of goods and services go or higher, you feel okay about it because your house went up in value and your retirement account went up in value.

So, the assets go higher and you don’t feel as poor. Sure, I mean, gas is six bucks a gallon, but look at the price of my house, right? So, they tell us the plan. Inflate the debt away, pump asset prices higher, and then gaslight anyone who complains about it. But again, there’s a better plan than even that, and this is where Bitcoin comes into play. And before you roll your eyes, stick around and watch what I’m talking about. Okay, Bitcoin acts as a liquidity sponge. It is the most sensitive asset to global liquidity.

That means when global liquidity, when the money supply goes up, gold goes up, S&P 500 goes up, all those things, but Bitcoin goes up the most. It’s 8.9 times sensitive to global liquidity versus 1.4 times with gold. All right, so it’s absorbing more liquidity than anything else. Now, if Bitcoin, why Bitcoin? If Bitcoin goes from right now today about $118,000, let’s say it goes up to about $500,000 per Bitcoin. What that does is that takes billions of dollars of purchasing power that would have gone into homes or would have gone into apartments or would have gone into rental properties or whatever, and it puts it into Bitcoin and it’s no longer bidding those assets up.

So now, instead of Tesla and Google and all the stocks going so much higher, because all that money had to go somewhere, instead of all the homes going up so much higher because the money has to go somewhere, now it can go into Bitcoin. That’s the relief valve. And the thing with Bitcoin, it doesn’t compete against consumer goods. It’s not competing against homes. It’s not competing against real companies like Tesla, Coca-Cola, et cetera. And so Bitcoin can absorb the most of that, be the release valve, and it could keep regular assets like home prices down.

Now, this might seem absolutely crazy to you, and that’s okay, but let me show you a couple of things because you might think I’m crazy, but let me show you a couple of things. Now, Howard Letnick, Howard Letnick is the Secretary of Commerce for the Trump administration. He’s also one of the Wall Street titans, runs one of the biggest firms, Cantor Fitzgerald. Now, I did a video about him recently. We’ll link to it in the show notes down below. And we talked about how one man, Howard Letnick, could 10X Bitcoin from inside the US government.

And in this video, I basically laid out the web of companies that he’s created around every point of Bitcoin. His company has the major share in microstrategy, major share in Tether, the stablecoin company. His company, now his son, has taken the lead. I have that right here. So now his son has taken the lead, and he’s putting billions of dollars into all the Bitcoin related SPACs, a $3 billion one and a $4 billion one, all around Bitcoin. So the Secretary of Commerce, the Wall Street hedge fund titan, who’s now running policy in the US government, is buying up all these Bitcoin related companies, and his son now is taking the lead.

Do you think they might know something? What about the President of the United States? Just this week, we saw Donald Trump himself, DJT Media, Trump Media, which I believe he owns half of, bought $2 billion of Bitcoin. You might think I’m crazy. Why is Trump himself buying $2 billion of Bitcoin? Why is his Secretary of Commerce buying Bitcoin? Why is his son running his company buying billions and dollars of Bitcoin? Maybe, just maybe, the Bitcoin release valve is something you should be paying attention to. Okay, now what about the stablecoin correlation here? So stablecoins have been around for a long time, obviously, but since the Genius Act has been passed, we’ve seen stablecoins, assets under management go up by over 32%.

That means the amount of money parked in stablecoins is absolutely skyrocketing. Not just that, what we know is that the second largest stablecoin company, which is called Circle, they’re about, I think, 25% of the market versus tethers like 75% of the market, but we can see they just had an IPO. And just in a matter of like a month, they’re up almost 200% their stock. So we can see that Wall Street understands what’s going on. They’re launching this at a rapid rate. The banks are launching this at a rapid rate. The Trump administration and Trump himself are buying it at a rapid rate.

Something’s going on here. Now I’ve analyzed over eight years of data of the correlation between stablecoins and Bitcoin. And when I look at that, there’s three distinct correlation periods between each one. And when you understand the correlation, and then you take into account Scott Bessent’s prediction or forecast of a $3.7 trillion price of Bitcoin, then all of a sudden we have a very clear target of what that could mean for Bitcoin. And I’m going to do a whole other video about that in the next couple of days. So make sure you’re subscribed to this channel if you want to catch that.

And before you leave, you should go watch this video on Howard Letnick, and this ties to Bitcoin right here. And I’ll see you over there. [tr:trw].

See more of Mark Moss on their Public Channel and the MPN Mark Moss channel.