E.B. Tucker — "The Treasury Secretary has a plan… it'll probably work"

0:00 The setup — a $6B long-end buyback, triple the usual size

• Cambone's framing: "The Treasury Department to buy back six billion in longer-term debt. That's triple the normal level." She asks whether the long end is "starting to look like a room nobody wants to stay in."
• "It's the issuer walking into the market and saying, 'Hey, we'll take that off your hands.' Triple the size, not double, triple."

1:12 "This makes complete sense to me" — Bessent is managing long rates down

• "You've got a Treasury Secretary that has a plan and it's a pretty good plan." People who think "this is just some horrible hyperinflationary events coming" are wrong: "It's actually not true."
• The mechanism: "he's managing longer term rates down. And he realizes that he's got a constant flow of short-term demand for Treasury bills," and that flow exists because "we are transitioning into a new monetary system right now."

2:03 From "the dumbest idea I'd ever heard" to the new system

• "You're probably missing it because you're reading poorly written newsletters and watching negative content on YouTube."
• His own conversion: "when I read about stablecoins I thought it was the dumbest idea I'd ever heard. Why would I buy a digital token that was worth a dollar when I could just have a dollar?"
• What he now expects: "our new system is going to be where you park your dollars and you get stablecoins and you trade within an ecosystem that takes stablecoins."

2:50 The newsletter owns Circle; 140 banks are building OpenUSD

• "USD Coin… We own that company in the newsletter, the Tucker Letter. We have a portfolio there and we own that company."
• "The footnote here is that these companies have to buy certain assets with your dollars."
• "There's 140 banks and financial institutions that are forming a stablecoin called OpenUSD… towards the end of the year," so that JPMorgan can pay Wells Fargo on your behalf in it.

3:51 $400B today, "many, many trillions" — and it all has to sit in T-bills

• "There are 400 billion worth of stablecoin dollars right now. There's going to be many, many trillions. And the Treasury Secretary himself has said there's going to be many trillions."
• The GENIUS Act link: issuers "have to buy tons of 91-day or less duration T-bills," so Bessent has "this unbelievable amount of money coming into his system… which has never really happened before in this way."

4:26 "Essentially like a hedge fund that's trading with our money"

• The issuer "just sits on the dollar… they get to keep the money from the treasuries. They can buy stocks… there's rules and all this stuff."
• Scale: "You're not going to see less of this. You're going to see… like 10 times as much."
• Cambone cites Catherine Austin Fitts expecting stablecoins to be fully implemented by early 2027. Tucker: "It's happening now."

5:51 The float — nobody asks for the money back

• You buy "USDC Circle or Tether coin or whatever"; the company "sits on your $100,000 almost like a bank but without the same regulation," and with very few staff.
• "You never ask for your money back… Nobody really does that. And I know that because the stock that we have in the newsletter, that's the second biggest stablecoin."
• How he picks: "we're not going to buy the world's smallest stablecoin… we're going to buy the biggest stablecoin we can get," because the biggest operator is "sitting over there at the Treasury talking to the Treasury Secretary."

7:02 Tether's economics — $180B × 3.8% ≈ $7B a year

• "Tether's got like 180 billion… let's say they buy T-bills for 3.8% and they make like 7 billion dollars a year. 7 billion dollars a year for doing nothing except for issuing you a stablecoin."
• Adoption will be pushed, not chosen: "Wells Fargo will tell you you can't pay your mortgage unless you use OpenUSD coin." Stripe and "everyone's going to have this."

7:30 How Tether got there, and why Circle is different

• Tether came first because crypto traders "needed a faster way to settle… you had to sort of first buy Tether and then with Tether you could do your crypto transactions."
• Circle "was a little bit more organized… people from venture capital groups in California… Tether was always a little bit on the edge."
• "The system is now organizing itself where there's more connected US players getting involved… the Treasury wants many of these things so that the ecosystem is hyper-liquid."

9:06 "This is my house" — take Bessent at his word

• "I think it'll work is my point… I've listened to the guy talk in person before he was Treasury. He's not exactly an idiot."
• On Bessent's TV warning to traders ("if you trade against me, it's going to hurt"): "He's probably telling you the truth… The guy is not a stock promoter."

10:15 A managed system — and interest rates are no longer the lever

• "This is not raw capitalism… this is a managed system." For 20–25 years "we managed it using sort of real estate leverage, controlling interest rates."
• "What happens to interest rates is sort of not exactly the most important thing anymore… that's sort of over."
• Cambone: Warsh at Jackson Hole said "we don't want to use the gimmicks of the past," meaning QE, "but now you're talking about liquidity flooding." Tucker: "Correct."

11:11 The Fed shrank from $9T to "the sixes" — old QE is done, the new channel is stablecoins

• "The Fed got to like 9 trillion and now it's like in the sixes… the Fed relatively speaking has been sort of pretty tame."
• Old QE "bought bonds from the primary dealers… and everybody borrowed against their house. That's sort of done. But the thing is there's tons of money."
• The core claim: "they're basically taking this excess cash and funneling it into this new stablecoin system, which keeps a bid under short-term treasuries and allows them to slowly manage long-term rates. That's just their plan."

12:31 "There's probably not going to be a collapse" — through 2030

• "Instead of saying the world's going to collapse, which it's probably not going to collapse, I think it's better to say let's get in on this."
• Precedent: "if you fought the last 20 years of QE and housing… you really wasted a lot of time." The horizon: "Forget about what happens in like 2035. I'm talking about between here and 2030."
• On collapse-content channels: "I got to make some money before the collapse, which is pathological… most of these people that are hyper negative are probably just not going to make any money because they're just going to fight reality."

13:49 The system needs asset prices to rise — get bigger with it

• "We need you to keep working and paying tax… keep investing… keep spending… We need you to stay in that loop. So, we need things to keep going up in value."
• On inflation complaints: "You like it when your house goes up in value… but you don't like it when butter costs more."
• Pushed on the squeezed middle class, he says the critics are "the people that… go buy junk stocks that go to zero because they're scams."

16:03 A kilo bar, built from $50 slices

• "Let's say you made a thousand bucks in the market and let's say you took $50 of the thousand and bought a little bit of gold with it… That's how you do it. That's how I did it."
• The New York apartment, bought for cash, is "a horrible investment… But the thing is, I'm investing in my life." Investing is "a distance race and you can definitely compete."

17:12 Three cybersecurity stocks up 45% — and subscribers still want more

• "The S&P is up 12% this year. We have three cybersecurity stocks in our portfolio at the newsletter… together are up average 45%. One of them is down and two of them are up… almost four times the S&P 500."
• "People write me emails complaining… I need more." His rule: "You cannot plan [huge gains]… What works is having good habits."

18:21 Play the stablecoin theme through the growers, not the pink sheets

• "You can absolutely play ball on the stablecoin thing, there are companies that are becoming more valuable every single quarter."
• The trap: "some microcap stablecoin pink sheet stock that's not going to ever go anywhere that used to be a uranium stock or something. That's what most people do."

19:56 Not backed into a corner — Bessent is planning for 2030; it is not 1999

• Asked whether $40T of debt and weak duration demand forced the decision: "No. What are we going to do about tomorrow? That's what he's looking at."
• "When people talk about tech stocks are going to blow up like it's 1999. It's not true because it's not 1999… It's not pets.com."
• Scale has changed: when Bernanke and Greenspan started QE "the Fed balance sheet was 800 billion," and TARP's 700 billion "that's nothing" now.

21:45 What the rollout will look like — "safer"

• "You're going to see more stablecoins. You're going to see money markets looking dangerous and money going into stablecoins. You're going to see positive press about stablecoins."
• "The bank [will] tell you that it's more convenient, it's cheaper, and it's safer. That's going to be the key word… you're going to go along with it."
• "The guy's telling you what he's going to do… as a person that wants to make more money, you should maybe not fight all this stuff so much."

23:04 Gold's rally happened — a $1M gain buys $50K of gold and $100K of Bitcoin

• On his book Why Gold? Why Now?: "it's so easy to read." But "the gold rally happened… gold is not really the thing at this moment that is where the next action is."
• "If I have an investment gain of a million bucks, I might go buy $50,000 more gold, but I would buy 100,000 of Bitcoin." Gold stays "part of a balanced life for me."

23:50 The custodian mindset — 5% gold, 10% Bitcoin, and the "digital box"

• "I always looked at myself as a custodian of whatever was around me… It's not really my money. My job is to manage it… because it keeps me from being emotional."
• If a soured trailer-park investment "came back tomorrow, sure, I'll buy 5% gold. I'd buy 10% Bitcoin."
• Why Bitcoin: under Bessent's 2030 plan "you're slowly living in this digital box where everything you do is monitored and tracked… I should probably have some Bitcoin." He compares it to gold when he wrote the book "when it was like 12[00]": "you will understand and the price will be higher."

25:45 Host pushback on gold — and his answer

• Cambone: "you have Scott Bessent who loves gold… close with Druckenmiller. You have Kevin Warsh who… is a gold bug," and central banks like the Dutch want "the gold back in case of crisis… You can't discount the gold part."
• Tucker: "I love owning this stuff and I don't think there's gigantic upside. I think there's about as much upside as my New York place… if I got new money today, I would buy a little bit more of this and I would buy twice as much Bitcoin."

26:34 Bitcoin has no use case — the things it spawned do

• "There is no use case for Bitcoin. It's not going to be used… Everything else is going to be used."
• "The stablecoins wouldn't exist today if there wasn't originally a white paper about Bitcoin, but they're not the same as Bitcoin… They have almost nothing in common."
• Closing plug: "yesterday's issue [of the Tucker Letter] was amazing. You should read it right away."