Scott Besant 'astonished by the incompetence' — Janus Farifakis

Janus Farifakis calls the Treasury's recent attempt to push long-term yields down — led by Scott Besant — 'astonishing incompetence': the Treasury cannot solve its deficit by borrowing to buy its own long-dated bonds, and only Federal Reserve purchases would be effective. He argues the current moves don't constitute a systemic bond-market crisis; yields and inflation look similar to 2001, and the United States cannot 'go bankrupt' because it issues the global reserve currency.

Farifakis warns the real risk is inflation, especially cost-push inflation from the war in Iran raising oil prices. He says raising interest rates to fight that inflation will 'destroy businesses' and reduce aggregate supply, which can worsen price pressures. His policy prescriptions (verbatim) are: end the war in Iran, end the war in Ukraine, 'find the motives we've ended with China', and 'stop the idiotic spat, whether it's between the two big techs or tariffs or whatever.'

On the dollar's 'exorbitant privilege' he says the petrodollar element is fading due to electrification: '85% of Pakistani families are no longer connected to the electricity grid because they all have Chinese solar panels and invertebrates and Chinese batteries,' and that trend will remove the petrodollar aspect in the 'next 10, 15 years.' Still, reserve status persists because exporters recycle earnings into US assets — 'four and a half trillion' dollars of foreign savings keep demand for Treasuries, real estate, and equities.

He flags stablecoins and the 'Genius Act' as another channel: privately minted tokens like 'Tever' convert local money into dollars and then into US Treasuries, reinforcing dollar hegemony, but creating financial-stability risks. China, he says, builds a parallel payment system ('Enbridge, the blockchain-based international payment system') as insurance; it exists but is underused until geopolitics force its use.

Looking ahead to Xi's US visit (September 23–25), Farifakis frames the meeting as a 'game of chicken': US leverage is blocking Chinese exports; China's leverage is rare earths and metals. The best outcome would be both sides 'set the big sticks on the floor' and reach mutually advantageous agreements.