Buyer of Last Resort

The Fed, the WHO, the Epstein files, and the question nobody wants to answer

Good morning! A 59-year-old man boarded public transportation in the Democratic Republic of Congo, sick with a virus that has no vaccine. He crossed the border into Uganda. He went to a hospital in Kampala, where he died. His body was then transported back across the border to the DRC for burial. Along the way, he moved through mining towns, transit hubs, border checkpoints, and hospital corridors, surrounded, at every point, by people who had no idea what they were standing next to.

There are now 336 suspected cases of the Bundibugyo strain of Ebola in the DRC. Eighty-seven people are dead. The World Health Organization has declared a global health emergency. The Africa CDC director noted, with what seems like heroic understatement, that the region is “very vulnerable and fragile.” He also noted that his team doesn’t have the manufacturing capacity to produce the personal protective equipment needed to keep their own healthcare workers alive.

We don’t have a vaccine for this strain. We have a candidate, tested on monkeys, showing about 50% efficacy, that has not yet been assessed in human patients.

The United States, historically the world’s anchor institution in exactly this kind of crisis, contributes $130 million annually to the World Health Organization. That number, as former White House global health security coordinator Stephanie Psaki recently noted, is roughly equivalent to what the Pentagon spent on lobster and steak. We are, in other words, pulling our weight.

Or rather, we were. The current administration has moved to leave the WHO entirely. The people at federal health agencies who plan rapid outbreak response? Gone. The systems supporting them? Dismantled. “Many of the people and the systems are gone now,” Psaki said at a recent Washington event on pandemic preparedness. “This is just one of many, many pathogens. These types of things will continue happening.”

Anthony Fauci, who has not yet been classified as an extremist organization, put it plainly: pandemic preparedness “must involve working closely with international partners, and that’s something that, unfortunately, we seem to be steering away from right now.”

The aperture we should be looking at is not that everything is broken; but that the breaking has a pattern. Public health is being abandoned, monetary authority is being captured, evidence of elite crime is being buried under spectacle, and the people who insist on remembering are treated as threats. The through-line is not incompetence. It is impunity.

Let’s talk about Kevin Warsh. Warsh was just confirmed as Federal Reserve chair with 51 votes, the bare minimum, which is appropriate, because this appointment is doing the bare minimum of pretending to be a normal thing. The same week he was sworn in, we got two inflation data releases that are, in the technical economic sense, not great.

Max @UNFTR does some heavy lifting for us. CPI for April: up 3.8% year-over-year, the hottest reading since May 2023. Energy up 18% annually. Gasoline up 28%. Groceries up 0.7% in a single month, the biggest jump in four years. And real wages fell 0.3% year-over-year, the first annual decline in three years, which means prices are going up and paychecks are going down, a combination that economists call “stagflation” and ordinary people call “what the hell is happening.”

Then came PPI, the producer price index, which measures wholesale prices upstream and tells you what’s coming in sixty to seventy-five days. April PPI came in at 1.4% for the month alone. Year-over-year, final demand prices rose 6%. Energy at the wholesale level spiked 7.8%. Gasoline up 15.5% in a single month.

Here is the thing about those numbers that should genuinely alarm you: they only capture the leading edge of the Iran conflict. The Strait of Hormuz has been functionally closed since March. Tankers aren’t moving. A third of the world’s oil reserves have already been drawn from strategic stockpiles. The full supply shock is still working its way through the system. What we’re seeing now is the preview. The feature presentation is still loading.

Now, Warsh says he wants to bring rates down. The problem is several-fold. The FOMC (Federal Open Market Committee) has twelve voting members and he’d need to bring a majority along. More fundamentally, the rates that actually govern your mortgage and your car payment aren’t the federal funds rate, they track the 10-year Treasury, which the Fed doesn’t control. The market does, and the market has, with characteristic bluntness, decided that the United States under its current management is a credit risk. So the 10-year isn’t going anywhere useful, regardless of what Warsh does with the overnight rate.

This brings us to Scott Bessent, Treasury Secretary and the most self-satisfied man in a room that contains no shortage of contenders. Bessent’s entire job is to keep US debt cheap and attractive to foreign buyers. His boss is doing the opposite, torching American credibility tariff by tariff, Truth Social post by Truth Social post. The Treasury has reportedly been offering swap lines to nations like the UAE, not because the UAE needs money (they very much do not), but because we’re trying to stimulate artificial demand for dollars. We are the world’s reserve currency doing a Groupon promotion.

Here’s where the story stops being about interest rates and starts being about something larger. In March 2024, a then-Manhattan Institute economist named Steven Miran, now a Fed governor, co-authored a white paper with Dan Katz, who is now chief of staff at Treasury. The paper proposed, among other things, giving the president at-will power to fire Fed board members and regional bank presidents, bringing the Fed’s operating budget under congressional appropriations, shortening the 14-year terms designed to insulate governors from political pressure, and restructuring the FOMC so all twelve regional bank presidents vote at every meeting, a change JP Morgan noted would “materially increase the influence of the president over US monetary and regulatory policy.”

Warsh, now on the inside, has publicly described his agenda as a “regime change” and welcomed “a good family fight” with the institution he just joined. Read that sentence again.

The play, as best as it can be reconstructed: manufacture a crisis. Point at the Fed. Say it’s broken and blocking relief for ordinary Americans. Direct Congress to build legislation around the existing framework, which, conveniently, was already written. The prize isn’t lower interest rates; it is putting the interest rate decision, and more importantly the bailout decision, permanently under the purview of the executive branch.

These people write things down. Project 2025. The Mar-a-Lago Accord. The Miran/Katz paper. They are not fringe documents. They are operational blueprints written in search of a crisis that would make them actionable.

Which brings us to the stablecoin trilogy, and the most audacious financial maneuver since someone convinced the world that mortgage-backed securities were AAA.

The Trump family’s World Liberty Financial has issued a stablecoin called USD1. The token sales have pushed the family’s crypto proceeds to approximately $1.4 billion since taking office. The launch alone reportedly netted $57 million. They’ve secured a reported $2 billion in arrangements, including a deal with an Abu Dhabi sovereign wealth fund.

At the same time, Congress is building the regulatory architecture that would legitimize their coin, protect their market, and eliminate their primary competitor, which is, extraordinarily, the United States government itself, in the form of a central bank digital currency that Congress has effectively already banned.

The trilogy works like this: The Genius Act, already signed into law, establishes a regulatory framework for stablecoins and requires issuers to back their coins with Treasury securities. This actually has a defensible public rationale, it creates a new captive buyer for US debt at a moment when foreign demand is softening. Fine.

The Clarity Act, which just cleared the Senate Banking Committee 15 to 9, is the crypto industry’s bill. It moves most of the crypto market from SEC oversight, disclosure-based, strong enforcement, institutional mandate to protect investors, to CFTC (Commodities Future Trading Commission) oversight, which is roughly a third the size and has a long institutional history of being friendly to the industries it regulates. The last time we moved a complex, poorly understood financial instrument from the SEC to the CFTC, it was called derivatives, the year was 1999, Wendy Gramm left the CFTC to join the Enron board, and her husband Phil passed the legislation. Within two years, Enron imploded. Within a decade, the global financial system did the same.

The anti-CBDC Surveillance Act bans the Federal Reserve from ever issuing a retail digital currency. The stated rationale is privacy, the government shouldn’t be able to track your digital spending. Valid concern. But ask yourself: should a private stablecoin controlled by a small number of unaccountable entities, one of which just moved its headquarters to El Salvador, concern you less than the Federal Reserve? With a government digital currency permanently off the table, the field clears for coins like USD1, authorized under CFTC oversight, operating in a regulatory environment built by a Congress that received $200 million in crypto industry campaign contributions in the 2024 election cycle alone.

The two Democrats who crossed over on the committee vote are instructive. Ruben Gallego of Arizona received approximately $10 million in crypto industry support in his 2024 Senate race, was named the top Democrat on the Senate Banking Subcommittee on Digital Assets, and recently held a fundraising retreat alongside Marc Andreessen, whose firm has invested in over 100 crypto startups. The ranking Democrat on the digital assets subcommittee is, in other words, a sponsored post.

Elizabeth Warren filed 44 amendments on ethics, anti-money laundering, consumer protection. Republicans killed every single one through procedural means. Mark Warner, one of the more crypto-friendly Democrats in the chamber, voted no anyway, because some senators apparently felt that enriching a sitting president’s family with zero guardrails was a bridge too far.

The White House wants a signing ceremony by July 4th. Of course, they do.

What we are watching is the privatization of seigniorage, the profit a sovereign captures by issuing currency. Under Bretton Woods, that belonged to the United States government. Under the current arrangement being legislated into existence, a meaningful piece of it will belong, in perpetuity, to the Trump family. Not through theft, exactly. Through legislation. Through a regulatory framework that eliminates the government competitor, shifts oversight to a friendly and undersized regulator, and calls it innovation. The feudal lord didn’t steal your harvest. He owned the mill.

On a street in TriBeCa, a few blocks from where Jeffrey Epstein was found dead in his cell in 2019, a gallery is currently housing 3,437 bound volumes of law enforcement documents. Eight tons of paper. Millions of documents, photographs, and videos released by the Department of Justice in January.

The exhibition is called the Donald J. Trump and Jeffrey Epstein Memorial Reading Room, which is the kind of name that either makes you laugh or makes you feel slightly ill, and possibly both simultaneously.

One of the backers, David Garrett, explained the rationale this way: when you’re scrolling and you see a cat video and an ICE raid and your aunt’s birthday cake and evidence of what he called “the worst crime in 250 years of American history,” it all takes the same weight. The physical mass of the thing, eight tons, velvet ropes, artificial candles flickering in the center of the room for the victims, is an attempt to restore proportion.

Danielle Bensky was 17 and an aspiring dancer when Epstein abused her. She attended a preview of the exhibition. She had expected to be traumatized. Instead she was moved, by what she described as the care taken to protect survivors, and by a message that seemed to be: how much is here and needs to be investigated.

“It kind of knocks the wind out of you,” she said.

The bulletin board downstairs, where visitors leave comments, is running a consistent theme. We all need to be more outraged. Where is the justice? Keep prosecuting. And one that needs no elaboration: How?

Nina Litvinova spent sixty years fighting the version of this story she was born into.

She began in the 1960s, distributing banned literature and coordinating aid for Soviet political prisoners. She spent her final years working with Memorial, Russia’s premier human rights organization, supporting anti-war prisoners inside Russia, until the Russian Supreme Court designated Memorial an extremist organization and shut it down.

Last week, at 80 years old, she died by suicide. Her cousin, journalist Masha Slonim, published her farewell letter with a three-word caption: “Putin killed her.”

In her final letter, Litvinova wrote: “Life has become unbearable for me, ever since Putin attacked Ukraine and began killing innocent people, while thousands in our country are endlessly imprisoned for opposing war and murder.”

It wasn’t the brutality that broke her. It was the imprisonment of the witnesses. The criminalization of the act of seeing clearly and saying so.

In Warsaw on May 9th, activists erected 100 memorial crosses in front of the Russian Embassy bearing photographs of Ukrainian children killed in Russian missile strikes. Over 700 Ukrainian children have been killed since 2022. More than 20,000 have been illegally deported. In the Estonian border town of Narva, museum officials draped a banner over the castle walls facing Russia: Putin - a war criminal.

These are not gestures of hope exactly; more acts of record. The insistence that this happened, that we saw it, that we said so.

The answer to how is the thread running through everything this week. How does a hemorrhagic fever cross a border while the institutions that would have tracked it are being dismantled? How does a president’s family position itself to collect a permanent toll on the global transaction system while Congress builds the architecture to make it legal? How does the Fed get set up for a hostile takeover while inflation rips and the markets absorb the risk premium of an unreliable borrower? How does a woman who spent sixty years fighting totalitarianism decide she cannot watch another round?

The files weigh eight tons. The answer to how is: in plain sight, documented, one volume at a time.

When the financial historians write about this era, it will not have happened in the dark.

Neither will the rest of it.

Now, because life insists on being absurd and beautiful anyway, Marz and I are going outside to do yard work.

This is, of course, a negotiated activity. I plant things. Marz occasionally decides that whatever I have planted would benefit from immediate archaeological reassessment. We have discussed this. Treaties have been drafted. Compliance remains uneven.

But the skies are blue here on the Southern Oregon Coast, and the American chestnut seedlings I planted in March are leafing out and looking healthy. That may sound like a small thing after a week like this, but it doesn’t feel small to me. The American chestnut was once one of the great trees of the eastern forests before blight nearly wiped it from the landscape. To plant one now is to participate, however modestly, in an act of repair.

So we keep planting, watching, and remembering. When necessary, we keep Marz away from the seedlings.