| Swan Dive — October 21, 2025 Addison Wiggin This morning in Washington, the Federal Reserve opened its first Payments Innovation Conference, and with it, a new chapter in U.S. monetary policy. Governor Christopher Waller — long considered one of the Fed’s more pragmatic voices — set the tone. “We are well into a technology-driven revolution in payments,” he said. “The Federal Reserve intends to be an active part of that revolution.” For the first time, the Fed openly embraced the DeFi world it once treated with suspicion. “You are welcomed to the conversation,” Waller told industry attendees, adding that the goal is to merge the old and new rails of the global financial system — traditional banking and digital finance — under one roof.
That’s the real story today: innovation as a monetary strategy. Only God knows what the strategy was leading up to this conference.
Behind the formal speeches and academic veneer of the conference lies a hard truth.
The U.S. government is carrying $37 trillion in debt, and interest payments are climbing faster than defense spending. By inviting fintech and DeFi innovators into its orbit, the Fed is doing something deeply practical: modernizing the dollar’s plumbing to keep it liquid, efficient, and dominant.
The Fed’s sudden warmth toward innovation isn’t charity — it’s self-preservation.
If the dollar is to remain the world’s reserve currency, it must evolve faster than its rivals. And if Washington hopes to fund trillion-dollar deficits indefinitely, it needs new buyers, new rails, and new trust.
The merging of traditional finance with blockchain-based systems is how that happens. It’s how the Fed digitizes the Treasury market, tokenizes debt, and makes the dollar programmable without losing control.
This, dear reader, is Dollar 2.0 — what we’ve been talking about since the seismic event of the Senate passing the GENIUS Act on July 18, 2025. 📉 Markets Catch Their Breath The stock market pulled back slightly on Monday as trade tensions and fresh inflation worries crept back into view. The S&P 500 slipped 0.6%, the Nasdaq fell 0.4%, and energy stocks led declines.
Food inflation remains the top concern among U.S. households. The administration’s immigration crackdown may tighten agricultural supply chains just as tariffs lift import costs.
At the same time, the White House is weighing new tariffs on Nicaragua, citing human-rights abuses, while the 39% levy on Swiss watches — yes, even watches — has cut exports to the U.S., hurting one of Europe’s most symbolic luxury trades.
Abroad, Japan made history. Sanae Takaichi became the country’s first female prime minister, a conservative in the mold of Margaret Thatcher, and — reportedly — a fan of Iron Maiden. Expect firmer fiscal policies, a tougher yen stance, and perhaps a cultural shift in a nation that has long resisted female leadership. 💰 The OpenAI Mania And speaking of catalysts, consider OpenAI —now valued at an astounding $500 billion, according to Deutsche Bank. That’s 3.5 times Spotify’s market cap and nearly equal to Netflix, despite generating just $5 billion in annual revenue.  Even if OpenAI triples revenue to $13 billion this year, its Price-to-Sales ratio would still hover near 38x — three to five times higher than Netflix or Spotify, which have hundreds of millions more users. OpenAI, by comparison, has roughly 20 million paying subscribers.
Consumer spending on ChatGPT has plateaued in Europe, with growth now near zero after peaking at +20% in 2023. Yet investors continue to price in boundless growth — what we’ve come to recognize as a classic late-stage bubble pattern.
Every era has its siren. In 1929, it was radio, in 1999, the internet, in 2021, crypto, and now it’s AI.
Each time, the promise feels different. The math doesn’t change much. 🌏 Rare Earths and Realpolitik President Trump signed a rare earths partnership with Australian Prime Minister Anthony Albanese, pledging up to $8.5 billion in projects to break China’s dominance in the metals that power electronics, EVs, and defense hardware.
China still controls 70% of mining and 90% of processing, but the U.S.–Australia deal signals intent. For Australia’s miners, it’s a windfall; for Washington, it’s a hedge. Even Cleveland-Cliffs shares jumped on speculation that American mines could yield rare earths too.  After the announcement, Trump commented, “By this time next year, we’ll have so much rare earth, these minerals will be trading for, like, $2 bucks.”
Easy-peasy, geopolitics driving supply chains. Whoever controls the minerals controls the machines — and by extension, the data, the energy, and the leverage. Continued Below...
Gold has hit all-time highs, breaking $3,600 an ounce - but history shows it could be on the verge of its biggest bull run in over half a century... triggered by a likely major event, eerily similar to what happened in the 1970s. (It's NOT inflation or anything you're likely expecting.) Now, a top analyst says you can capture ALL of the upside without touching a risky miner or a boring exchange-traded fund. He sees extraordinary potential gains long term with very little risk. See this immediately.
🏦 The Other Side of the World — And the Bubble While the U.S. courts innovate, global investors are exiting the mirage.
In China, foreign property funds—BlackRock, Carlyle, HSBC, and others — are offloading commercial real estate at steep losses. Office values in Beijing and Shanghai are down 40% since 2019, and distressed sales made up 22% of all transactions last year.
It’s a slow-motion unwinding of years of cheap credit, speculation, and misplaced faith in perpetual growth — a mirror image of the AI enthusiasm now inflating valuations on Wall Street. 🚀 Moonshots and Misfires At NASA, there’s frustration. The agency’s $3 billion lunar contract with SpaceX is falling behind schedule. Transportation Secretary Sean Duffy told CNBC that SpaceX’s repeated Starship explosions and ambitious refueling plans have delayed its Artemis III mission — potentially until 2032.
The U.S. may now tap Blue Origin and other competitors. Shares in Rocket Lab, Intuitive Machines, and Karman popped on the news. The irony isn’t lost — one company’s failure is another’s rally catalyst. Capitalism drives competition as well as innovation. 🧠 The Thread That Binds It All From the Fed’s embrace of DeFi to OpenAI’s sky-high valuation, one thread runs through this week’s story: innovation is both the engine and the excuse.
Innovation justifies debt, fuels speculation, and sustains belief in growth at any price.
But innovation is also the instrument through which policymakers can reset the game — digitize the dollar, rewire finance, and extend the empire of credit a little further.
The Payments Innovation Conference isn’t a side event — it’s a signal that Washington’s next lever for managing its debt and defending the dollar is technological dominance.
If the 20th century was defined by industrial might, the 21st is being defined by monetary software. The race to digitize the dollar is not about efficiency. It’s about survival, for real.
~Addison P.S. We have a unique Grey Swan Live! planned for this week.
Join us this Thursday, October 23, at 2 p.m. ET for our live session, Anatomy of a Stock Market Bubble. We’ll explore how innovation is driving this cycle — and what it means for the dollar, debt, and your portfolio.  We’ll outline the bubble narrative and prep you for Friday’s follow-up live event for paid-up annual members.
Because on Friday, October 24, our paid-up annual members will get an exclusive look at our updated asset allocation strategy, we’ll do a quarterly review of our model portfolio and reveal three trades we’re calling “Plunge Protection Plan” — a portfolio insurance strategy in case the crotte hits the fan on Wall Street.
If you're not an annual subscriber yet, go here to become one now and unlock your access to the Plunge Protection Plan on Friday.
If you have any questions for us about the market, send them our way now to: Feedback@GreySwanFraternity.com.
How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three. 
(Or… simply pre-order Empire of Debt: We Came, We Saw, We Borrowed, now available at Amazon and Barnes & Noble or if you prefer one of these sites: Bookshop.org, Books-A-Million or Target.)
Please send your comments, reactions, opprobrium, vitriol and praise to: feedback@greyswanfraternity.com |
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