Good morning:

We went live and a little long. Moving forward, I’m aiming for 8:30 to film this show, and I’ll do it live… Then it takes about 10 minutes to render and send…

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Good Morning:

Well… that went live without me realizing it… that was wild…

Let’s talk markets at the open…

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Good morning:

Another morning of waiting.

The ceasefire expires tomorrow. Iran may or may not show up to talks in Pakistan, and Vice President Vance has not even left the country yet. Trump says it is “highly unlikely” he will extend the deadline, and that if it expires, “lots of bombs start going off.” Iran’s military command has vowed retaliation for …

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So, Scott…

Dear Fellow Traveler:

Yesterday I published a piece at Postcards from the Edge of the World called “Congress didn’t ban surveillance. They privatized it.”

I focused on the compliance costs, the coming industry consolidation, and how Congress banned a government-run digital dollar due to surveillance concerns…

Only to then require every private stablecoin issuer to build the exact same surveillance infrastructure at their own expense…

That piece was about who controls the rails.

This piece is about what flows through them.

Before we start… two rules…

Don’t call it private-sector “Quantitative Easing,” okay… even though… it feels like it.

Second… look at this squirrel.

Don’t pay attention to what’s happening.

After we’re done, just focus on the war, private credit, and anything else you can to distract you from the fact that they’re rewiring the financial system right now.

The type of thing that will redefine everyone’s portfolio for the next decade.

Scott Bessent Said It

In November 2025, Scott Bessent stood up at the U.S. Treasury Market Conference… at the Federal Reserve Bank of New York… and told a room full of policymakers that the stablecoin market “could grow tenfold by the end of the decade thanks to the innovation made possible by the GENIUS Act.”

If Bessent is right… and this is a scenario… that implies roughly $3 trillion in demand for U.S. debt out of basically nowhere in the post-COVID era.

Bessent says this expected demand is a major reason the Treasury doesn’t need to increase its coupon-auction sizes… and in a world where America sits $39 trillion in debt, that matters.

Said Bessent:

“Existing financing capacity from current auction sizes and robust demand in the bill market have given us flexibility to manage our upcoming potential borrowing needs.”

Translation… stablecoin-driven demand for T-bills is why the government can keep financing its debt without increasing long-term bond auctions.

The crypto press covered it as a bullish Bitcoin headline, because they don’t get it...

That’s not a bullish headline for Bitcoin.

This was the Treasury Secretary describing a new deficit-financing mechanism in plain English, while everyone in the room nodded politely, nobody asked a follow-up question, and most people were looking at their phones.

The financial system doesn’t force participation.

It forces behavior once you participate. No one is forced to issue stablecoins.

But once they do, the statute says reserves must be held in a basket: cash, insured deposits, short-dated T-bills, reverse repos backed by Treasuries, and Treasury-only money market funds. All linked to the dollar.

Get Used to the Word “Trillion”

The GENIUS Act requires every permitted stablecoin issuer to hold 1:1 reserves in short-duration Treasuries, cash, and cash equivalents.

So, every dollar of stablecoin in circulation must be backed by high-quality liquid assets, primarily short-duration Treasuries and Treasury-backed equivalents.

In late 2025, the stablecoin market was about $300 billion.

Bessent’s projection is $3 trillion by the end of the decade. It could come in lower. But the mechanism matters more than the exact number.

T-bills currently outstanding are about $6.82 trillion. If stablecoin reserves reach $3 trillion, that would represent mandatory demand approaching half of the current T-bill market, depending on issuance levels.

And… It’s mandated so long as stablecoin demand persists… creating consistent demand and helping to anchor short-term yields lower than they otherwise would be.

This is a form of captive, statutory demand…

Now, I said the magic word that makes the purists flinch. “Quantitative Easing” – where the Fed buys U.S. debt and injects capital into the financial system.

This isn’t QE mechanically… but the effect on financial conditions can rhyme.

Consider how big this demand would be…

• QE1 was approximately $1.75 trillion.

• QE2 was about $600 billion.

• QE3 was about $1.6 trillion.

Total across all three pre-COVID rounds was nearly $4 trillion.

Those three programs required a financial crisis, two recessions, years of FOMC deliberation, and approximately 10,000 hours of cable news debate over whether Ben Bernanke was saving civilization or destroying it…

Scott Bessent is projecting up to $3 trillion in stablecoin-driven Treasury demand.

That’s QE1 and QE2 combined.

And it doesn’t require the Federal Reserve to do anything.

There’s no FOMC vote or press conference. No one is paying attention. For about 98% of the people reading this, it’s the first time you’ve learned about it.

And all I can say… is… best of luck to market bears.

There’s no pressure on future Fed Chair Kevin Warsh to increase the central bank’s balance sheet.

There’s no shot of a tapering tantrum or debate about “transitory” arguments.

No one will be on CNBC yelling about money printing.

The debt just… grows. The T-bill demand follows…

Every new stablecoin minted ultimately becomes a sustained demand for Treasury-backed assets.

That’s automatic… and persistent.

Or at least until Congress changes its mind, which… have you met Congress?

The demand scales automatically with adoption.

More stablecoins means more T-bills bought, more downward pressure on short-term yields, easier financial conditions, and higher asset prices.

It’s a flywheel for government financing, and the fuel is the same thing crypto was supposed to replace… trust in the U.S. dollar.

It’s not QE mechanically. It’s QE behaviorally… sustained demand for government debt and easier financial conditions… without the Fed having to touch a single bond.

Everyone who models liquidity through central bank frameworks now have to account for this.

This is a generational rewiring.

What This Does to the S&P 500

“So, Garrett, the government found a new way to finance itself. What does this do to my portfolio?”

Fair question...

Let’s connect the plumbing to the thing you actually own.

The effect runs through three channels, and all of them point in the same direction.

The first is financial conditions.

Roughly $3 trillion in mandatory T-bill demand pushes short-term yields lower than they’d otherwise be. Lower short-term rates ease financial conditions across the entire system… that means cheaper borrowing, looser credit, more liquidity sloshing through the pipes.

That’s the same mechanism that made QE supportive for equities for 15 years… except this doesn’t require the Fed to lift a finger.

The liquidity floor gets built under the market automatically, by statute, as stablecoin adoption grows.

That’s structural support for risk assets that doesn’t depend on Jerome Powell or Kevin Warsh’s mood.

It doesn’t eliminate drawdowns. It just changes who has to panic first… that matters.

The second is settlement velocity.

This is what I’d say: few people have adequately modeled it yet…

Traditional markets run on banking hours with T+1 settlement.

T+1 settlement means that when you buy or sell a stock, the trade doesn't officially settle until 1 business day after the transaction, so the money and shares are stuck in limbo for 24 hours before they actually change hands.

Regulated stablecoins settle instantly, globally, 24/7.

I can’t stress how important this… Now, capital can move without waiting for banks to open, so liquidity never sleeps… there’s no 24-hour gap where money is frozen mid-transaction, which means more of it is available to deploy at any given moment.

Again… so you can understand this…

Every time money moves, it enables the next transaction downstream…

So if settlement takes a day, the entire chain waits a day at every step.

Instant settlement means the same dollar can move through five hands in the time it used to move through one. This means that the effective velocity of money in the system multiplies without anyone printing a single new dollar.

The institutional capital that wouldn’t touch unregulated crypto… pension funds, corporate treasuries, sovereign wealth… is likely to use regulated stablecoins backed by Treasuries and supervised under the Bank Secrecy Act.

That’s an expansion of the pool of capital that can flow in and out of dollar-denominated assets at any hour, if adoption scales as expected.

More capital, moving faster, over more hours in the day, across more borders.

Broader liquidity bases mean there’s always a bid somewhere. 24/7 liquidity compresses volatility in stable periods… and accelerates it in unstable ones.

Now you understand why some people want 24-hour equity markets. There’s always a bid… there’s always a transaction. There’s always a spread.

And that brings us to our third channel… the ones who benefit.

Companies like Moody’s, Nasdaq, Palantir, Fiserv, and Fidelity are positioned to operate on these rails… and the law just structurally expanded their total addressable market.

The winners are the firms already leaders in compliance, data, and market infrastructure… which happen to already be big components of the S&P 500 itself.

This is… from a liquidity perspective… bullish.

• Easier financial conditions support higher multiples.

• Broader settlement infrastructure brings in more participants.

• More participants drive more stablecoin adoption.

• More adoption drives more T-bill demand.

• More T-bill demand eases conditions further.

It’s a flywheel, not a guarantee… but it’s spinning in the direction of higher equity prices over time, because the plumbing of the market is being rebuilt to structurally favor liquidity expansion.

None of this eliminates risk. If anything, it concentrates it… into fewer, larger, more trusted channels, which is exactly what institutional money needs to show up at scale.

But we’ve been doing that for a decade with passive investing and the MAG7.

Let’s just keep building the Jenga tower, baby.

BRRRRRRRR….

The Ratchet

Three weeks ago, I wrote about Hyun Song Shin at the BIS and how the financial system was “rewired” after 2008.

The GENIUS Act creates a new ratchet that doesn’t depend on the Fed at all.

Once institutional capital starts flowing through regulated stablecoin rails… once the compliance costs are sunk and the settlement infrastructure is built… that money doesn’t go back to T+1 banking hours.

The rails just exist, and the money flows…

The T-bill demand is structurally persistent as long as the system remains in place.

And stablecoins settle instantly, globally, around the clock… which means institutional capital that wouldn’t touch unregulated crypto will absolutely use regulated 24/7 dollar settlement backed by Treasuries.

For context… consider our old friend, the reverse repo facility… the thing that absorbed excess liquidity for two years…

That thing peaked at about $2.5 trillion.

Bessent is projecting stablecoin reserves that exceed that.

There’s a structural bid for government debt, comparable in scale to the RRP at its peak… but structurally different in function, and structural and persistent rather than purely cyclical.

Under this framework… the burden of proof shifts to the bears.

The U.S. is running deficits that require enormous Treasury issuance.

The traditional buyer base is flat or shrinking.

And now Bessent is telling you… at the Fed… that stablecoin demand gives Treasury “flexibility.” That’s the polite way of saying that the U.S. government found a new buyer, the new buyer is mandatory, and the new buyer is about to get very large.

And it creates a perpetual feeling of “There Is No Alternative” to anything but equities and other assets that benefit from the structural uplift.

This is a new wiring…

The New Wiring

The Postcards piece last night was about who controls the chokepoints.

This piece is about why the government wants traffic flowing through them in the first place.

The surveillance serves the state.

The liquidity serves the market.

The mandatory reserves serve the deficit.

Compliance costs serve the incumbents.

Everyone will get what they want… and we will call all of this “innovation” because it’s running on a blockchain.

For context, that’s what we did a decade ago by putting the word “smart” in front of a product that already existed and charging twice as much for it.

Shin called the post-2008 system “rewired.”

This is another pull of the wire.

This system doesn’t remove risk.

It relocates it… into the assumption that demand for U.S. debt will always be there.

If that changes, the mechanism doesn’t just weaken… it inverts.

But this is a structural tailwind.

It doesn’t prevent drawdowns.

It shapes what happens after them.

BRRR… baby… BRRR…

Stay positive,

Garrett Baldwin

It is a trader’s world right now.

The rest of us are just living in it.

Last week, this market ripped to all-time highs on the back of liquidity, CTA buying, a massive Treasury injection timed to coincide with tax payments, and a ceasefire that may never have been true in the first place. We got the longest Nasdaq winning streak since 1992,…

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For two months, we have been saying the same thing. Be careful. Watch the instruments. Wait. And now, after all of that waiting, the market has completely flipped on us in the span of about ten days.

Two weeks ago, nobody wanted to touch this thing.

And now the S&P keeps pushing new highs. The Nasdaq has strung together nearly two weeks of c…

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“Whatever It Takes.” - The U.S. Treasury Department… Probably

Good Morning,

Well…

I spent a few days considering whether any policy accommodation might have helped create conditions for this rally, but I was heavily focused on the Federal Reserve and what might be happening in Japan.

Then Scott Dunn asked… “Have you paid attention to what Scott Bessent is …

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A quick note before I go and film.

MoneyPrinterPro.com is up and running again.

The S&P 500 is Green, but the Divergence warning is because of some selling this morning. Both readings are positive, but as I’ll explain when I film in about 45 minutes… There are now several U.S. banks calling for a reversal. (Because of course, they are.)

See y…

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Dear Fellow Traveler,

Thanks to for the coverage today in his great podcast on banking stocks.

He highlighted a post I did on expected shifts in the “Reserve Asset Management” program at the Federal Reserve.

But as I noted… It’s not just about the Fed.

It’s really… at its core… about the U.S. Treasury Department… and the actions that Kevin Warsh will take if and when we start to see problems emerge in the future.

Treasury Secretary Scott Bessent had pilloried his predecessor, Janet Yellen, for her management strategy of the U.S. debt. And then he went on to engage in the same yield-curve practice as Yellen and former Treasury Secretary Steve Mnuchin.

He went from grading their papers to copying them...

Let’s start with the math…

According to a March 2026 report, the U.S. Treasury plans to borrow $683 billion over the next two quarters.

That’s $249 billion more than the same period last year.

Over the last 12 months, from March, the government borrowed roughly $2 trillion.

And according to Treasury refunding data, it has now borrowed more than $500 billion in 10 of the last 14 quarters…

When I said the Treasury Department will focus on the short end of the curve, I was pointing out that how the government borrows matters more than how much it borrows.

The way it’s choosing to borrow right now has reshaped the capital and credit conditions underneath the entire stock market. Basically, it’s all about short duration.

Short Paper vs. Long Paper

When the Treasury needs to borrow money, it has a choice.

The government can issue long-term bonds… 10-year notes, 30-year bonds… that lock in the debt for decades. Or it can issue short-term bills… 4-week, 8-week, 52-week paper… that mature quickly and must be rolled over constantly.

Before the pandemic, bills accounted for about 10% to 15% of the Treasury’s outstanding debt, according to analysis by the Peter G. Peterson Foundation.

Today, the government is above 20% on bills that mature in less than 12 months.

The 4-week bill auction averaged $47 billion back in 2016.

In 2026, it averages $101 billion per issuance.

That makes it the largest individual auction size among Treasury securities.

It’s now larger than the 2-year note and the 10-year.

What about the 30-year bond? Well… the 30-year is now the Treasury's vinyl collection. It’s impressive, nostalgic, and increasingly decorative.

So… Bigger.

The Treasury is financing the richest government on earth the way a college kid finances spring break… on a rolling credit card with a teaser rate.

The Peter G. Peterson Foundation put it plainly in its latest quarterly refunding analysis.

This strategy offers “relatively reduced costs, at the expense of greater exposure to volatility and interest-rate risk.”

Borrowing short-term is cheaper right now, but it means the government must constantly refinance its debt.

If rates spike, the cost resets immediately instead of being locked in for decades.

Why This Is Quietly Bullish for Stocks

This is the part that connects directly to what we talked about in “The Quiet $40 Billion,” and it’s the part that is hard to explain in practice…

When the Treasury issues a 30-year bond, it ties up capital in long-duration exposure for a long time.

An investor buys that bond, and their capital is committed for decades.

It is less available for near-term allocation to stocks, corporate bonds, or other investments. Long-duration issuance tends to absorb capital for longer periods.

When the Treasury issues a 4-week bill instead, the opposite happens.

The investor buys the bill and, if held to maturity, gets their money back in four weeks, then must decide what to do with it again. The cash keeps cycling. It never leaves the system for very long. Short-duration issuance keeps liquidity circulating.

And since these are “cash-like” instruments, they’re considered high-quality collateral… Now multiply that by $101 billion per auction.

The Treasury is choosing to keep money moving through the financial system more quickly by borrowing short rather than long.

Much of this short-term issuance is initially absorbed by money market funds and cash vehicles, which keeps it circulating within short-term funding markets.

Every time those bills mature and roll over, cash comes back into the market. Some goes right back into new bills.

But some of it moves into repo markets, corporate credit, and equities.

On top of that, the Fed is currently buying roughly $40 billion per month in Treasury bills through reserve management operations to maintain ample reserves in the banking system.

So, the Treasury issues short-term paper, the Fed absorbs a chunk of it, and reserves are credited back into the banking system.

The plumbing stays flush.

Short-term rates remain more stable.

And the stock market gets to operate in an environment where liquidity is always showing up, always recycling, and never getting locked away in 30-year paper.

The Trade-Off

This is the same duration mismatch we’ve been talking about all year.

Long-term obligations funded with short-term capital.

The government owes money for decades, but finances it on a rolling basis that resets every few weeks.

It works great as long as rates cooperate and the auctions keep clearing.

But it also means the government is more exposed to sudden rate moves than at any point in the last decade.

If something disrupts the short end… a funding crisis, a failed auction, a spike in overnight rates… the cost of servicing that debt jumps immediately.

There’s no 30-year lock-in to absorb the shock. There’s just next month’s bill auction, and the one after that, and the one after that.

For now, the effect on markets is increasingly clear.

The Treasury floods the short end with supply, and the Fed absorbs part of it…

They tell us that it’s not Quantitative Easing,

And my dentist tells me it's not a root canal, it's 'advanced endodontic therapy.'

Same drill. This Fed program leads to QE-like outcomes: a more stable banking system, a functioning repo market, and broader support…

It’s not a “Big Print…” but it’s a signal to the financial system.

And the stock market sits atop a liquidity engine that runs specifically because the government chose to finance itself on a revolving credit line rather than a fixed-rate mortgage.

The machine runs on short-term paper.

It’s the financial equivalent of saying, “I don’t need a long-term plan. I just need four weeks of things going incredibly well… repeatedly… forever.”

As long as the paper keeps rolling, the capital keeps flowing. And as we know, all of these short-term Treasuries can be pledged more than once as collateral, creating a multiplier effect that operates efficiently… but dangerously…

The question, as always, is what happens when it stops…

That’s why it’s so important to prepare for major changes and shifts in broader conditions. You can get started, right here.

Also, be sure to check out … If you’re looking for long-term positions and ideas, he knows his stuff…

Stay positive,

Garrett Baldwin

“People dancing, people laughing, a man selling ice cream…. financed with 4-week paper.”

Every morning, we get up early and try to make sense of what is happening before most people have had their coffee.

We don’t always know why things are moving. What we do know is how to read the data in front of us and lay out a playbook for whether it is safe to put capital to work.

For weeks, we have been flying by our instruments.

Momentu…

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Good morning:

So much for the ceasefire. Talks in Pakistan collapsed over the weekend with the two sides further apart than expected. Iran demanded control of the strait, war reparations, and the release of frozen assets. The US wanted full denuclearization and toll-free passage through the Strait of Hormuz. Nobody blinked, and now we are looking at a n…

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My apologies… I had the opportunity to get an earlier flight today, and that put me at the Raleigh airport right now… which means… You don’t want to see me, and I’m gonna be going through security… I will release the morning video I shot at 6:20 in about 15 minutes.

For now…

March CPI drops at 8:30, and it is going to be ugly. Consensus has …

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Money Printer Pro readers are going to get their piece this morning first because I’m in North Carolina… and filming has been a chore…

In the video above, I skip through all the leveraged ETFs and ETNs I follow to focus on individual-sector momentum… that’s the video… I’ll get you a deeper dive tomorrow of the tickers and what they do… But …

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Above, you’ll find a video that walks you through the Hedge of Tomorrow report that I released over the weekend. Obviously… it is a long report, so I felt it might be helpful to walk you through it and lay out the thesis and ideas…

If you missed the article, it’s here. That includes a PDF of the report.

There is no sales pi…

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A quick note. The bulk of this rally continues in names that were on our breakout list, like Seagate and Intel. Everything is squeezing right now, and as I said… it appeared in the Pulse and Cap Weight yesterday. Plus, we saw HSBC and Yardeni (and the Compound) saying “this is the bottom” yesterday…

The moves in small-cap healthcare and sh…

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After more than five weeks of negativity weighing on this market, we finally have something to work with.

Trump announced a two-week ceasefire with Iran just before the Tuesday deadline, and Iran has confirmed it will allow safe passage through the Strait of Hormuz during that period.

As expected, futures are up sharply this morning. Oil ha…

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I look forward to seeing the unusual positions that were taken around 3:55 pm…

After we pulled back to near neutral in recent days, with our Nasdaq and Russell readings Yellow and S&P barely red, the market got its headline. Measured shifts around those key moving averages, combined with inflows today, pressed us higher…

And now the market…

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Not much has changed since yesterday. Same market, same setup. Dollar sitting around 100, WTI pushing toward $115, Brent around $109. Futures are down a little. The VIX is elevated near 25.

The market is waiting for something it can grab a hold of. What we have had is headline-to-headline trading and tweet trading, and that is not something …

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We’re having a bit of an issue with our data feed on Capital Wave. There’s an issue in how our feeds communicate with our data source. We’re working on it…

Please standby…

I’ll fall back on our previous signal if needed…

In the meantime… here is the Top multi-study momentum list…

And the multi-study weakness list…

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