Moribund Monday: More of the Same; Stocks Up, Gold, Silver Up; U.S. Debt to Be Vanished Into the Crypto Cloud with Stablecoins

There's an interesting video on India Times featuring Russian senior adviser to President Putin, Anton Kobyakov, suggesting that the U.S. is planning to eliminate its $37 trillion in government debt through sleight-of-hand via stablecoins such as Tether and Ripple. There are dozens of stablecoins, and more to come, including those issued by financial intermediary companies like Binance and PayPal.

While it's not clear exactly how the diminution of U.S. government debt would be accomplished, the idea is primarily to have stablecoins buy up most, if not all, of the U.S. debt issuance, then devalue the stablecoins. In essence, the stablecoins would default on the debt, leaving (mostly) American crypto-lovers the ultimate bag-holders, though the rest of the world is not necessarily out of the loop either.

This kind of scheme - the stuff of counterfeiters like those at the Federal Reserve - might actually work for the government, but the stablecoin holders would be left with nothing and no recourse.

The immediate query concerns where these stablecoins get their "money" to buy U.S. bills, notes, and bonds in the first place. The most probable answer would be the Federal Reserve itself, which is notable for conjuring such "money" out of thin air.

How it would work is actually a tricky wicket. The U.S. Treasury issues bonds to finance the government. They do it all the time, though these days, there aren't many takers for four percent 10-year notes, etc., so, stablecoins to the rescue. The Fed funds the stablecoins with enough money (that the Fed just creates out of thin air) to bid on the bonds at auction. Eventually, as the scheme unfolds, the stablecoins will be the only bidders, so they'll get the debt at easy-peasy rates, like one or two percent.

The yield doesn't really matter, since they are buying with essentially worthless paper and paying out in "stable-currency", if there even is such a thing. Americans and foreigners will be encouraged to convert their cash or bank balances into stablecoins, which will be accepted everywhere, given enough time to ramp up.

The government gets cash; the stablecoins collect interest. All well and good. The principal, however, is never to be returned. It stays as stablecoin, circulating around the global economy. In due time, the debt is paid, the stablecoins (principal) continuing to buy goods, services, drugs, guns, whatever. You have some, your neighbor has some, everybody has stablecoins.

However, because economics is a dismal science, prices for anything and everything continue to rise because the basis of the dollar - the stablecoin - is being "debased." Most people won't notice that the U.S. dollar has turned into toilet paper because it's the "new digital currency" which the media promotes as easy to use, simple, wonderful. Meanwhile the U.S. debt gets paid off, maybe (this is the tricky part), if congress decides to stop overspending on ghastly projects with which to line their own pockets.

Like everything else, there's a catch. Congress will never stop spending beyond their means. The standard of living for average Americans will decline, gradually. Most will hardly notice they're eating cat food instead of prime rib.

It's a wicked con and the president, who wants to make America "the crypto capital of the world" is 100% behind it. Fun for all. Kinda.

Meanwhile, back at the company store, COMEX gold futures peaked Monday at $3,685. Silver topped out at $42.34. WTI crude settled out around $61.79.

At the Close, Monday, September 8, 2025:
Dow: 45,514.95, +114.09 (+0.25%)
NASDAQ: 21,798.70, +98.31 (+0.45%)
S&P 500: 6,495.15, +13.65 (+0.21%)
NYSE Composite: 21,173.64, +37.59 (+0.18%)