END-STAGE EMPIRES ARE RUN BY THEIR BANKERS

29 October 2025

Bessent steps in to protect profits of friendly investors.

---

FINANCIAL RESCUE AS IMPERIAL OVERREACH

The strange case of an American Treasury Secretary covering massive hedge fund losses with public money.

Bessent, Argentina, and the American Taxpayer.

---

1. Story – The Bailout Nobody Asked For

Scott Bessent, U.S. Treasury Secretary and long-time Wall Street insider, has brokered a US$20 billion rescue swap with Argentina.
Officially, it’s designed to stabilise a struggling emerging-market partner.
In practice, it protects U.S. hedge funds - notably BlackRock, Pimco and Fidelity - from heavy losses on their Argentine bond positions.

Bessent’s history with these hedge funds goes back decades. Many now see this as a bailout for his old financial friends, not a policy in the interests of the American taxpayer, who shoulders the inflationary and fiscal costs.
Argentina’s inflation, at over 250%, and its looming debt repayments make this a highly risky commitment of U.S. backing.
(Buenos Aires Times source)

---

2. Context – Empire’s Financial Reflex

This episode illustrates a deeper trend in late-stage empire economics:
- The financial and political centres of power have fused
- Wall Street gambles abroad, and when those gambles fail, Washington steps in.

Rather than allowing markets to clear the mess themselves, the imperial centre props up its own capital class, diverting public money away from domestic renewal.
This is not new — it is a recurring pattern in end-of-empire histories.
The centre protects capital flows outward, while the periphery remains indebted and dependent.

---

3. The Moral Hazard Machine

Such rescues create what economists call moral hazard:
- investors take reckless risks knowing they’ll be saved

- taxpayers face austerity measures (cuts in services) and/ or tax rises, to cover bailouts.

The results are predictable:

• Resource diversion - tax and Treasury support flow to global finance, not to Main Street

• Accountability collapse - bailouts happen and the press gives out diplomatically worded cover stories (aka propaganda) to keep us on board
• Erosion of legitimacy - meanwhile, ordinary citizens are not stupid and know very well when elite speculation has gone wrong.

How is it possible to reform a financial system when the stability depends on shielding the same insiders who caused the instability in the first place? ... reform becomes impossible.

---

4. End-of-Empire Paradigm

Historically, empires in decline exhibit three common traits:

1. Finance captures the state - public institutions serve private capital
2. Financial overreach - production is outsourced to vassal states, but instead of profits being reinvested into (real) resources and further productive capacity, they are put into financial (paper) assets like treasury bonds and stock markets and property 
3. Legitimacy loss - citizens sense the rules no longer apply equally - asset prices inflate for the rich, while High Street prices inflate for the remaining 95+%.

Bessent’s Argentina deal shows an imperial centre spending its dwindling credibility to protect its own network ie a short-term fix that further deepens long-term fragility.

---

5. Outlook - When Empires Become Credit Lines

This is what happens when finance replaces industry as the core of power. The global trade reserve status of the dollar gives America and its financial class immense power as we see in this case, but is also the cause of its undoing.
An empire once built on production and innovation now survives by extending credit (printing)  to others and to itself - it monetises its debt ie borrows more and more at the short end and prints money to cover the mounting interest payments and debt rollover repayments.

Such cycles always end the same way:
the financial core overextends, confidence and trust erodes, the bailouts become bigger, the taxpayers angrier, the legitimacy thinner, until the system collapses under its own weight.

What does "collapse" look like?

At each deal like this one, policy-makers push the can a little further down the road, saving the system temporarily... but only for themselves.

---

References
• Buenos Aires Times, “Bessent steps in to protect profits of friendly investors in Argentina” (Oct 2025)
• Ray Dalio, Principles for Dealing with the Changing World Order (2021)
• Paul Kennedy, The Rise and Fall of the Great Powers (1987)

---

When Empires Bail Out Their Financiers, short term stability leads to chronic fragility.