Soft Landing or Soft Failing 🤷🏻♀️
Dear Investors,
Welcome to this week’s edition of the Myth of Money. If you would like to keep in closer touch, please reach out on X (formerly Twitter) below.
As we are heading into a highly anticipated rate decision on September 17-18, many are asking if the Federal Reserve achieved the soft landing they have promised.
The latest jobs report paints a concerning picture of the U.S. economy. In August, 142,000 jobs were added, falling short of the 160,000 forecasted. This slowdown is significant when compared to the more robust growth of prior years. The three-month average now sits at just 116,000 jobs, down from 211,000 a year ago. While the unemployment rate ticked down to 4.2%, these figures reveal a broader issue: the economy isn't on track for the "soft landing" promised by Federal Reserve Chair Jerome Powell.
High interest rates, sustained for too long, have damaged the economy, creating a delicate balance that’s growing harder to maintain. Although companies are still issuing bonds and the IPO market has seen a slight uptick, the combined pressures of expensive borrowing and sluggish economic activity are squeezing businesses. The tight labor market has made hiring costly, while reduced consumer spending further erodes corporate profits. This precarious situation raises the likelihood of two scenarios: either a hard landing, a more severe economic downturn, or a stagnation period with no real recovery in sight.
Is the U.S. Dollar Facing A Decline?
While the U.S. economy faces domestic challenges, a global shift is also underway: the decline of the U.S. dollar’s dominance. The dollar, long the world's primary reserve currency, is losing ground. Its prominence in international trade and global stability has been eroded by a combination of internal economic struggles and external geopolitical forces.
The most significant threat comes from the BRICS alliance—Brazil, Russia, India, China, and South Africa—who are actively working to reduce their reliance on the dollar. These nations are developing alternative payment systems and increasingly trading in their own currencies. The BRICS bloc, which has expanded to include countries like Turkey and Iran, signals a growing global movement away from the dollar.
Former President Donald Trump acknowledged this issue in a recent speech, admitting that U.S. sanctions on countries like Russia and Iran have weakened the dollar's influence. While he supports sanctions, Trump argued that they have unintentionally pushed countries toward alternatives to the dollar. His proposed solution? Lift the sanctions and focus on preserving the dollar’s status as the world’s reserve currency. Trump went as far as to say, "Losing the dollar as the world's currency would be like losing a war."
A Swing and a Miss
Trump's latest venture, World Liberty Financial, aims to strengthen the U.S. dollar through decentralized finance (DeFi). On the surface, integrating the dollar into DeFi seems like a forward-thinking move, but the project has significant flaws. The focus on U.S.-pegged stablecoins contradicts the core principles of cryptocurrency—decentralization and financial independence.
Additionally, the project’s structure raises serious concerns. Reports suggest that 70% of the project's tokens are reserved for insiders, a disproportionately high number that casts doubt on its credibility. This insider-heavy approach undermines trust, making it seem less about advancing DeFi and more about enriching a select group. In an industry already plagued by scams and fraud, such a model only deepens skepticism.
In contrast, Bitcoin offers a more reliable alternative. Its decentralized nature and limited supply make it impervious to government manipulation and inflation, positioning it as a valuable store of wealth in a destabilized financial world. Rather than doubling down on the dollar, Trump should focus on realizing his vision of the U.S. as the "crypto capital of the world."
Navigating a Fragile Economy
The current economic landscape presents a mix of challenges and opportunities for investors. High interest rates and slowing growth have created uncertainty, while the global movement toward de-dollarization and the rise of cryptocurrencies offer a potential way forward.
De-dollarization is no longer just a possibility—it’s an inevitability. As the BRICS nations and others continue to challenge the dollar’s dominance, the global financial system will increasingly turn to alternatives. Cryptocurrencies like Bitcoin, with their resistance to inflation and decentralized design, stand to benefit from this transition.
Trump’s vision of America as the “crypto capital of the planet” aligns with this emerging reality. By fostering innovation, reducing regulatory barriers, and ensuring the crypto industry can thrive, the U.S. can maintain its economic leadership. However, this will require a balanced approach—deregulating enough to encourage growth, but safeguarding the financial system to prevent instability.
The Path Forward: Embrace the Future
Let’s be honest: clinging to outdated financial models won’t pull the U.S. out of its current economic mess. Fiat currencies are depreciating globally, while cryptocurrencies continue gaining traction among powerful economic players.
The focus shouldn’t be on artificially propping up the dollar within DeFi but on embracing the broader potential of crypto. By reducing unnecessary regulations and encouraging innovation, the U.S. can secure its position as a leader in the evolving global financial system.
As Trump rightly notes, maintaining the dollar’s status as the world’s currency is crucial. But achieving this requires forward-thinking policies, not an insistence on outdated approaches. The U.S. has the chance to lead the next financial revolution, but that means fully embracing the future—and in this future, cryptocurrencies will play a pivotal role.
This Week By the Numbers 📈
Markets & Economy 📊
Bond traders pricing in steepest non-recession Fed easing
US blue-chip corporate bond sales hits record two-day sales streak
U.S. Labor Dept: 142,000 jobs added in August, below analyst expectations
July jobs growth revised down to 89,000, also below estimates
US manufacturing activity slowed for a fifth straight month
Canada cuts rates for third-straight time to 4.25%
Canada’s unemployment rate climbs to 6.6%
Americas overtake China in semiconductor chip sales
Crypto & Blockchain 🚀
FBI warns that North Korea aggressively targeting the crypto industry
Ripple will add Ethereum-compatible smart contracts to XRP Ledger
Binance founder CZ banned for life from managing the exchange as part of plea deal
ZKB, Switzerland's 4th large bank, to offer institutional crypto services
Bitcoin hashrate hits new all-time high of 746 EH/s
Siemens issues $330M digital bond on private blockchain with German banks
Mastercard launches non-custodial crypto debit card in Europe
Japan’s financial regulator considers lower taxes on crypto
Japan's big 3 banks to test stablecoins for cross-border payments
Skyscanner integrates with Travala for hotel bookings in over 100 cryptocurrencies
CryptoKitties’ ‘Eggs’ soar 30x as NFT community calls for a comeback
Politics & Regulation ⚖️
Crypto attorney John Deaton wins GOP primary for Massachusetts Senate race, will challenge Elizabeth Warren
Harris proposes a smaller capital gains tax hike than Biden
Biden expected to block US Steel acquisition
Brazil’s Supreme Court upholds X ban, drops fines
Far-right party wins German state election for first time since 1945
California law requires consent for AI replicas of dead performers
Internet Archive’s e-book lending ruled not fair use by appeals court
S. Korea moves to investigate Telegram amid rise of deepfake porn
Snap sued for allegedly being a “breeding ground” for predators
Global & Geopolitical Events 🌍
Israel erupts in 2-day protest against Netanyahu’s hostage policy, demanding cease-fire
Bluesky adds 1M users in 3 days amid X ban in Brazil
Four killed in Georgia school shooting, father of shooter charged
Top Stories 🗞️
Trump says Elon Musk has agreed to lead proposed government efficiency commission as ex-president unveils new economic plans
Donald Trump unveiled a slate of new economic plans Thursday, including the creation of a government efficiency commission that he said Elon Musk has agreed to lead if the former president is elected in November. “At the suggestion of Elon Musk, who has given me his complete and total endorsement … I will create a government efficiency commission tasked with conducting a complete financial and performance audit of the entire federal government and making recommendations for drastic reforms,” Trump said in remarks at the Economic Club of New York. “We need to do it. Can’t go on the way we are now.” Trump in his speech also outlined proposals aimed at further reducing the corporate tax rate and tackling government regulations, including those aimed at energy production. He also vowed to rescind all unspent funds from one of the key laws passed under the Biden administration, embraced cryptocurrency and reaffirmed his plan to place sweeping tariffs on imports.
The US, UK, EU and other major nations have signed a landmark global AI treaty
The United States, United Kingdom, European Union, and several other countries have signed an AI safety treaty laid out by the Council of Europe (COE), an international standards and human rights organization. This landmark treaty, known as the Framework Convention on artificial intelligence and human rights, democracy, and the rule of law, opened for signature in Vilnius, Lithuania. It is the first legally binding international agreement aimed at ensuring that AI systems align with democratic values. The treaty focuses on three main areas: protecting human rights (including privacy and preventing discrimination), safeguarding democracy, and upholding the rule of law. It also provides a legal framework covering the entire lifecycle of AI systems, promoting innovation, and managing potential risks. The treaty will enter into force three months after five signatories, including at least three Council of Europe member states, ratify it. The COE’s treaty joins other recent efforts to regulate AI including the UK's AI Safety Summit, the G7-led Hiroshima AI Process, and the UN's AI resolution.
Robinhood Settles With DoJ For Failing To Allow Crypto Withdrawals
Robinhood has settled the Department of Justice (DoJ)’s first public action against a crypto firm. On Sep. 4, Robinhood Crypto, the digital asset division of the popular retail trading platform, agreed to a $3.9 million settlement with the DoJ. The action resulted from Robinhood Crypto allegedly preventing customers from withdrawing digital assets from the platform between 2018 and 2022. According to the California Department of Justice, Robinhood violated the California Commodities Law (CCL) by allowing customers to buy cryptocurrencies without delivering the assets. Customers were forced to sell cryptocurrencies back to Robinhood to exit the platform and could not withdraw the funds to digital wallets. Robinhood also faced charges for misleading advertising, The DoJ found that the platform claimed to provide the best available prices for digital assets through partnerships with third-party trading venues — a promise it did not always fulfill. Robinhood also failed to disclose that third-party trading venues sometimes held customers’ crypto assets for extended periods, the department said.
Telegram changes its tone on moderating private chats after CEO’s arrest
Telegram has quietly removed language from its FAQ page saying private chats were protected and that “we do not process any requests related to them.” The change comes nearly two weeks after its CEO, Pavel Durov, was arrested in France for allegedly allowing “criminal activity to go on undeterred on the messaging app." In response, Telegram spokesperson Remi Vaughn says the app’s source code has not changed. “Private chats are still private too – although you could always report a new incoming chat to moderators by using Block > Report. Anyone can check Telegram’s open source code and see there were no changes,” writes Vaughn in a statement shared with The Verge. Earlier on Thursday evening, Durov issued his first public statement since his arrest, promising to moderate content more on the platform, a noticeable change in tone after the company initially said he had “nothing to hide.” “Telegram’s abrupt increase in user count to 950M caused growing pains that made it easier for criminals to abuse our platform,” he wrote in the statement shared on Thursday. “That’s why I made it my personal goal to ensure we significantly improve things in this regard. We’ve already started that process internally, and I will share more details on our progress with you very soon.”
Coinbase Says it Unlocked First AI-to-AI Crypto Transaction
Two AI agents took part in the first-ever crypto transaction that didn’t involve humans, Coinbase CEO Brian Armstrong said. “What did one AI buy from another? Tokens!” Armstrong touted the achievement on Aug. 30. “Not crypto tokens, but AI tokens (words basically from one LLM to another). They used tokens to buy tokens.” According to Armstrong, this marks a significant achievement at the intersection of crypto and AI. Until today, bots and artificially created agents struggled to acquire resources because they couldn’t transact. “AI agents cannot get bank accounts, but they can get crypto wallets,” Armstrong added. “They can now use USDC on Base to transact with humans, merchants, or other AIs. Those transactions are instant, global, and free.”
“Myth Of Money” Book - Now on Pre-Sale 🤓
As many of you know, making financial education accessible has always been a passion of mine, and I’ve always offered it for free!
After a year of hard work, I'm excited to announce that my new book, published by Wiley Publishing, will be officially available on October 1st!
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For individuals the book is available for sale on Amazon!
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Until next week,
Tatiana Koffman
About the Author: Tatiana Koffman
Hi there and thanks for reading! If you stumble upon my newsletter, you will notice that I write about money, economics, and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital, and Cryptocurrencies. I write to make financial topics more accessible and create equal opportunity for the next generation of investors. Currently working as a proud General Partner at Moonwalker Capital.
(More about me 👉 here).