Nathan Tankus’s latest piece: Day Five of the Trump-Musk Treasury Payments Crisis of 2025: Not “Read Only” access anymore

… a top DOGE employee, 25 year old former SpaceX employee Marko Elez, has not only read but write access to BFS servers

…

Additionally, I can exclusively report that while there was initial hesitation from “IT Leadership” to give them access, they relented. However, they still believed this was extremely risky with one member of leadership saying “I’ve never done anything like this before”, according to a source familiar with the situation. A current IT employee of the Bureau of the Fiscal Service told me “This level of unchecked access is critically dangerous to the economy and the government”. When I replied “this is terrifying” to being informed that they have “write access” this source replied “Yeah it's not good. Read privileges on its own still would have left room for catastrophe, but read and write is apocalyptic.”

It is as of yet unclear whether anyone on the Payment Application Modernization (PAM) system or the “Secured Payment System” (SPS) have been put on “paid administrative leave”, coerced into resigning or quit in protest. All that is known is that Marko can “access and query” SPS and that there was someone who gave Marko a “tour” of the facilities. We do not know where they are in operationalizing any control. One senior IT source can see Mark retrieving “close to a thousand rows of data” but they can’t see the content because the system is “top secret” even to them. No source I have has knowledge of what DOGE is doing with the data they are retrieving.

What we know about China’s retaliatory measures against the US

As we reported earlier, China’s Finance Ministry has slapped tariffs on certain American items in retaliation for the Trump administration’s 10 percent tariff on all Chinese goods entering the US.

Here are more details on China’s tit for tat levies:

• Starting on February 10, China will impose levies of 15 percent for US coal and LNG and 10% for crude oil, farm equipment and some autos.

• China’s Commerce Ministry and its Customs Administration said the country is also imposing export controls on tungsten, tellurium, ruthenium, molybdenum and ruthenium-related items to “safeguard national security interests”.

• China’s anti-monopoly regulator has also announced it is launching an investigation into Google, without offering details. Google products, including its search engine, are blocked in China, but it works with local partners, including advertisers, in the country.

One Republic became the first ever American band to perform on the CCTV New Year’s Gala (春晚), live from the Wuhan stage

Why? Because during Covid lockdown, frontman Ryan Tedder came out in support of Wuhan amidst waves of anti-China sentiment, livestreaming himself enjoying the Wuhan hot dry noodle, and promised that one day he would visit the city of Wuhan!

Wuhan hot dry noodle as imagined by Tedder using spaghetti noodles:

Wuhan (武汉) hot dry noodle tattoo:

He finally got his wish to perform in front of the entire nation today, straight from Wuhan itself!

Yes, this is news.

The Short Case for Nvidia Stock

This is not a finance article nor is it financial advice despite the title (I do not condone any gambling nor do I hold any positions on Nvidia, just obligatory disclaimer here), but genuinely an excellent breakdown of the DeepSeek “breakthrough”.

To quote from a summary I read from Twitter:

• Use 8 bit instead of 32 bit floating point numbers, which gives massive memory savings
• Compress the key-value indices which eat up much of the VRAM; they get 93% compression ratios
• Do multi-token prediction instead of single-token prediction which effectively doubles inference speed
• Mixture of Experts model decomposes a big model into small models that can run on consumer-grade GPUs

That’s it! There is nothing groundbreaking about DeepSeek. There is no fundamentally new invention here (compared to the original transformer architecture). It’s simply a bunch of Chinese interns looking for shortcuts to bypass the tech sanctions, and stumbled upon a simple yet elegant solution to the problem.

What is groundbreaking though is that apparently none of the OpenAI engineers getting paid >500k per year managed to come up with a solution like this.

And this really is an indictment of the entire field of “AI”, the kind of people who are getting paid a fortune, and how overhyped, bloated and unrealistic it is to burn through $500 billion to chase their AGI scam which is never going to work. (The real AGI is as far as you can get from the current iterations of artificial neural networks based architecture, and we barely have any idea what it would look like).

The question is will it burst the AI bubble? Are we getting another AI winter? Or the US government will find a way around it like it did with all the crypto scam bullshit or the trillion dollar F-35 project?

What’s amazing about the reaction to this is that it took this long and a foreigner for their people to realize they live - and have always lived - in the Fourth Reich.

American propaganda is truly something.

When 50 thousand people were evacuated from the city of Pripyat following the Chernobyl incident in 1986, the Soviet government built an entirely new city, Slavutych in just two years, 50km away, to accommodate those who lost their homes.

From the start, Slavutych was planned to become a "21st-century city". Compared to other cities in Ukraine, Slavutych has a modern architecture with pleasant surroundings, and the standard of living in the city is much higher than in most other Ukrainian cities.

This would be the last city the Soviet Union would ever build. The entire country would collapse in just two years’ time, but they managed to do something like this.

Educational post: here we will debunk the myth of China’s dollar-denominated bonds in Saudi Arabia for those who are interested in learning about how the system actually works, and those who need a little help with connecting the dots.

A few months ago, some multipolar bloggers were jumping up and down about Saudi Arabia “ending its 50-year petrodollar contract” and how that is going to “end dollar hegemony” (I already wrote a whole post debunking that). Today we see the same people saying that China issuing dollar-denominated bonds in Saudi Arabia is actually genius and how that’s going to “end dollar hegemony”. So which one is it?

The answer is neither, and far simpler than you think. But to even be able to answer this question, we need to learn a bit about the fundamentals of the financial system, and especially to debunk the many misconceptions about the role of US treasury.

Don’t worry, I have deliberately stripped all technical jargons from this post, so anyone will be able to understand even if you know nothing about banking and finance. This post is meant to be educational - I firmly believe that learning about how the economy and the financial system operate can shield us from falling for right wing propaganda, and that is my goal of spending many hours writing this post here.

First, let’s lay out the main misconceptions that have been perpetuated on social media about the China’s dollar bond in Saudi Arabia, and what questions do we need to answer:

1. The misconception that the US government is financed by its treasury bonds (China is issuing dollar bonds at nearly the same rates, so investors will buy China bonds instead of US treasury bonds, so the US government can no longer finance its spending)
   • Question: What is the role of US treasuries?
2. A wild extrapolation that a $2 billion bond issuance somehow serves as a prelude to China issuing a $100 billion dollar bond which will then subvert the entire US treasury market.
   • Question: What can a $100 billion dollar bond do if China issues that?
3. The mental gymnastics involved to craft a narrative about why China issuing its bond in dollar in Saudi Arabia is actually good and that somehow is going to help the BRI countries pay back their dollar debt.
   • Questions: What is the intent behind China issuing dollar-denominated bond in Saudi Arabia? Can it really help Belt and Road countries pay back their dollar debt?

Let’s go through this point by point.

What is the role of US treasuries?