New Fed Chair and Trump’s Deal with China: Market Implications
Text version of the latest "Deconstruction."
This week, “Deconstruction” focuses on Trump’s agreements with China, a Bitcoin advocate at the helm of the Fed, a “neural network-hacked” crypto wallet, and Palantir’s AI warfare ideology.
Trump’s Visit to China and the AI Market Division
Donald Trump’s first trip to Beijing since 2017 was a necessary move after a U.S. court overturned the 10% tariffs on Chinese goods. This prompted both sides to discuss new rules of engagement.
Economic issues, including the purchase of Boeing aircraft in exchange for rare earth metals, were only part of the discussion. The key topic was the global restructuring of the IT market. Leaders deliberated on which AI technologies the U.S. would allow China to purchase and set strict controls over autonomous weapons.
The removal of trade barriers will deprive alternative markets (Vietnam, Mexico) of significant investments but will give European factories, where China previously dumped goods at low prices, a chance to survive.
Change at the Fed and Banks Against the CLARITY Act
The appointment of Kevin Warsh as Fed Chair can be considered a unique precedent. Unlike his predecessors, he is favorable towards cryptocurrencies, personally owns coins, and calls Bitcoin an “important asset.” In the long run, this is a powerful signal towards industry legalization, although his high interest rate policy will temporarily restrain the growth of risky asset prices.
Meanwhile, the Senate is advancing the CLARITY Act bill, which delineates the powers of the SEC and the CFTC. The most heated debate has centered around stablecoins. The banking lobby demands a ban on crypto exchanges paying users rewards for holding them, fearing that platforms like Coinbase will become more profitable than traditional banks and simply siphon funds from classic deposits.
Neural Network Recovers $400,000 in Bitcoin
After 11 years, a user was able to regain access to a wallet with 5 BTC using the Claude chatbot. Concerns arose online that AI had learned to “hack” the blockchain, but the neural network merely analyzed a chaotic array of historical data.
The user uploaded the contents of an old computer into Claude, the AI found the necessary backup file and discovered a bug in the password recovery program. The bot corrected the decryption logic and helped unlock the wallet.
Despite AI being a powerful tool for sorting old data, uploading encrypted keys to online services remains a critical security risk.
Private IT Corporations Seize Power from the State
Palantir, the company that created a unified database for U.S. intelligence agencies, now supplies the military with the Gotham system, capable of autonomously identifying targets on the battlefield.
Moreover, the corporation has begun to covertly influence government policy. Funds sponsored by top managers of Palantir and OpenAI pay TikTokers to stir up panic over the “Chinese AI threat” and spend millions discrediting politicians who wish to regulate artificial intelligence.
Analysts note a structural change: formally, laws are passed by government institutions, but the real technical infrastructure, determining what the state sees and whom it targets, is shifting under the control of private IT corporations.
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