Yes, don’t laugh. But this coming Palm Sunday, as Christians around the world mark the day Jesus drove the moneylenders from the temple, a different sort of cleansing might be underway on Wall Street — one targeting America’s rentier class. One undertaken by arguably the most famous rent extractor of all: Donald J. Trump.
As we’ve argued before, regardless of whether you are pro or anti-Trump’s tariff onslaught, it’s important to recognize the policy itself isn’t entirely deranged or lacking strategy. Increasingly, people are recognizing that when U.S. Treasury Secretary Scott Bessent talks about the need for a “detox period,” what he really means is a controlled stock-market implosion which induces a wealth transfer from the have-alls to the have-nots.
Yes, yes, what he giveth he will immediately taketh away with higher inflation, which will make a lot of people poorer. But, the hope, at least, is that it won’t last for long. And that soon enough, they will all be compensated with tax cuts, job opportunities and inbound investment flows.
Either way, the market correction we’re currently seeing — especially the pain in the so-called “forever stocks,” those rent-extracting darlings of the passive ETF era — isn’t just a natural correction. It looks like a targeted strike against the foundations of an excessively financialized economy built on rent extraction.
To understand the logic, you need to zoom out to the balance of payments. The United States has long run a current account deficit, buying more from the world than it sells. In return, it issues dollars — the world’s reserve currency — which surplus nations hungrily scoop up and recycle into U.S. assets: Treasuries, equities, tech stocks, commercial real estate. This “vendor financing” model fuels both U.S. consumption and global savings.
But here’s the twist: While the U.S. often earns more on its foreign investments than it pays out, the benefits of this surplus have increasingly accrued to global capital, a small domestic elite and the boomer generation at large — not American workers and taxpayers who create the conditions that make the dollar safe in the first place.
Should a boomer generation that has failed to invest in the sectors capable of ensuring common prosperity really be entitled to the outsized returns it is currently claiming? Isn’t the demographic issue the West is facing kinda their fault? That is the thinking here.
The resulting disequilibrium, they believe, has been quietly subsidizing the rest of the world for far too long. Not in a dramatic Marshall Plan sense, but in the quiet, persistent form of risk-free rent-seeking by foreign sovereigns, elites, and passive investors who park capital in monopolies or foreign assets, and extract returns without reinvesting in the productive economy.
Bessent appears determined to break that cycle by severing the flow of unearned rent, with a view to redirecting the wealth to the MAGA base.
His tool? A shock to the rentier stocks. Big tech, consumer brands, capital-light monopolies — the ones which generate high margins on global operations and then distribute those earnings to shareholders, a large portion of whom are foreign. If these stocks are forced down, the logic goes, the returns to foreign capital fall, the dollar becomes less of a riskless rent-yielding machine, and pressure builds for a capital rotation back to U.S.-centric, productivity-enhancing sectors: infrastructure, manufacturing, small business, energy transition.
But there’s more — stablecoins.
In Bessent’s world, the U.S. doesn’t stop exporting dollars — it just stops doing it for free. Instead of flooding the globe with high-yielding Treasury bonds that threaten the U.S. government with a debt doom loop or a road to Neofeudal serfdom, America should start charging for access to its safe assets via dollar-denominated stablecoins. These — being fully backed — would provide loans at a much higher cost of overall capital than onshore licensed institutions, pushing the system to an equity-financed rather than debt-financed world. The biggest stablecoins, after all, are financing their riskiest lending activities with the proceeds of the rents they made from risk-free interest rate arbitrage. Not with leverage (at least if you believe what they say). When domestic U.S. inflation is high and interest-rate returns are lucrative, stablecoins — by returning zero on deposits — make oodles by attracting mostly foreign and offshore dollar liquidity and parking it in USTs and dollar-denominated assets.
This dynamic is quietly beneficial to the system. It helps absorb excess dollar liquidity into a fully reserved framework, slowing money velocity and constraining credit expansion. It also ensures that interest earnings are not reflexively recycled into the economy, except through equity-based channels.
The fact that there is so much demand for zero-yielding exposures at all — even during high interest rate periods — speaks to the power of the dollar in international capital markets and commerce, especially in areas of the economy that correspondent banks fear to service. In that sense, the overall return forsaken by depositors to gain access to stablecoins reflects a type of service charge for usage of the dollar.
Given that Tether alone generated $13 billion in profit last year based on the arbitrage, that’s a customer base that’s hard to ignore (especially if you have access to a U.S. bank account and the means to track any lookalike IOUs you create reliably through the financial system).
Of course, once inflation cools and rates fall — or hit zero — the stablecoin profit engine stalls. At that point, issuers must either rely on retained earnings to cover costs or seek riskier avenues for yield. Yet, in a disinflationary or deflationary backdrop, such risk-taking may not be unwelcome. It could, in fact, play a counter-cyclical role.
Overall, a new kind of financial discipline emerges: If you want access to the dollar system, you pay a toll. Not in interest rates per se, but in terms of transaction visibility, compliance, risk-adjusted premiums, and a denial of automatic, unearned yield.
This could be the true financial reformation: A strategic reallocation of who gets to extract value from America’s output — shifting it away from faceless global capital and a boomer demographic and back to working U.S. citizens, or at least partners who operate on fair terms.
Time to feel sorry for the boomers?
Perhaps. But their wealth won’t be stripped from them — only reconditioned. They can still earn returns, but only if they redirect their capital into the types of investments that build dignified jobs and “common prosperity”. That at least is the idea. [Whether it works in practice is another matter.]
So yes, this Palm Sunday may mark more than just a spiritual clearing of the temple. It may also be the opening act of a financial reformation, where the moneylenders aren’t expelled, but rather re-priced, re-purposed, and asked to pull their weight.
More importantly, if Bessent can engineer the low-interest-rate environment he’s promised, this time the windfall won’t be squandered. The moment rates dip, the plan will be to lock in century bond deals to finance the great capital rotation — away from monopolistic tech and toward “common prosperity” stocks.
That’s why even if the EU retaliates by imposing charges for big tech and U.S. banking services, such as a financial transaction tax, it won’t necessarily hurt Trump’s mission or agenda. It might ironically even do him a favor. This is all the more the case if it propels the EU to build equally compelling equivalents capable of repatriating rents that would otherwise disproportionately flow to Silicon Valley and Wall Street.
The critical question, really, is whether any of this can happen without inadvertently killing the patient — or triggering a broader financial crisis? Chances are, probably not.
The other question worth considering is whether Bessent is steadfast enough to hold his nerve when blowback peaks? Has he communicated his vision clearly enough to maintain the confidence of the MAGA king when the administration’s popularity tanks? Or will he meet the fate of Liz Truss?
As the chaos of “liberation day” takes shape this week, it’s worth remembering: healthy economies aren’t defined merely by GDP figures, but by the fairness of their distribution — by market forces not just government handouts or welfare.
While the tariff plan might end up one of the worst mistakes in history, pretending the grievances it claims to address don’t exist is equally negligent.
For now, let’s hope markets have done their thing and priced in the worst of it already.
