Hayes Accuses Fed Of Covert Cash Creation: The Stealth Money Printer Exposed

Arthur Hayes just pulled back the curtain—and what he found wasn't pretty. The crypto pioneer is leveling a bombshell accusation: the Federal Reserve is running a shadow money factory, creating cash through back channels while the public watches the official numbers.

The Plumbing Behind the Policy

Forget the official balance sheet. Hayes points to the repo market and the Treasury's general account as the real engines. It's a classic shell game—liquidity moves from one pocket to another, greasing the wheels without ever showing up on the main ledger. The system's complexity isn't a bug; it's a feature that lets the rules get bent.

Why Crypto Watchers Should Care

This isn't just inside baseball. When traditional finance plays fast and loose with money creation, it's rocket fuel for the 'hard money' narrative. Every stealthy dollar printed is another argument for Bitcoin's fixed supply. It makes central bank digital currencies look less like innovation and more like the same old game with a digital coat of paint.

The Real Cost of Free Money

Someone always pays. Hayes argues this covert creation distorts everything—inflating asset bubbles, punishing savers, and kicking the can of real economic reform further down the road. It's financial engineering at its most cynical: creating the appearance of stability while fundamentally undermining it. After all, what's a central bank for if not to make expensive problems temporarily disappear?

In brief

• The Federal Reserve is launching the RMP program to inject $40 billion in liquidity into money markets.
• Officially presented as a technical operation, the RMP is, according to Arthur Hayes, a “disguised QE.”
• The BitMEX co-founder accuses the Fed of indirectly financing government spending at the expense of monetary transparency.
• Hayes claims this liquidity injection benefits scarce assets like Bitcoin, gold, and mining stocks.

The RMP: a liquidity operation or a disguised Fed monetization?

On December 10, following the FOMC meeting, the US Federal Reserve announced a 25 basis point reduction in its key rates, accompanied by the launch of a new program: Reserve Management Purchases.

This system, according to Fed Chairman Jerome Powell, aims to “maintain an adequate level of bank reserves” and supposedly has “no connection with the orientation of monetary policy”.

However, the operation involves the Fed directly purchasing short-term Treasury bills, with an initial amount of $40 billion from the first month. Officially, these purchases aim to relieve tensions in money markets, especially around the year-end fiscal deadlines.

In his essay “RIP Money Printing” published on Substack, Arthur Hayes openly challenges this presentation. He believes that “the RMP is a barely disguised way for the Fed to cash government checks”. Behind the apparent technicality of the operation, the former BitMEX CEO sees an inflationary maneuver that amounts to indirectly financing government spending.

The operational mechanism of the RMP presents, according to Hayes, all the characteristics of a disguised money creation program, particularly through the following effects :

• Direct purchases of short-term Treasury bills, immediately injecting liquidity into the financial system ;

• Declared political neutrality, with the Fed carefully avoiding the term “QE” to not revive the public debate on money printing ;

• A macroeconomic effect equivalent to money creation, since it absorbs part of the public debt without real productive counterpart ;

• The direct impact on the monetary base, through an increase in available bank reserves, likely to fuel latent inflation.

According to this reading, the Fed no longer just sets rates: it returns to a FORM of financial interventionism with lasting consequences, without openly admitting it.

Bitcoin, gold and rare assets : the big winners of the return of liquidity

Beyond the operational mechanism, Hayes focuses on the potential beneficiaries of this monetary liquidity resurgence. “I love quantitative easing because it amounts to money creation, and fortunately, I hold financial assets like gold, shares of gold/silver mining companies and bitcoin, which appreciate faster than fiat money depreciates”, he writes plainly.

For him, the main effect of the RMP is to favor the revaluation of rare assets, capable of preserving or even strengthening their value during monetary expansion. In this view, Bitcoin positions itself as a natural refuge against the depreciation of the dollar, just like physical gold or stocks linked to mining extraction.

But Hayes does not stop at listing the potential winners. He also denounces the systemic injustice caused by this type of policy: “unfortunately, in today’s world, for the majority of humanity, money creation destroys their dignity as productive human beings”.

According to him, those who do not hold assets are the first victims of money creation. Their purchasing power erodes, their wages stagnate against inflation, and the LINK between economic effort and produced wealth is broken. This structural imbalance fuels a wealth transfer to capital holders, exacerbating economic divides.

In this uncertain context, where Trump announces a historic shift for the Fed, Arthur Hayes’s interpretation takes on particular significance. If money creation intensifies in other forms, crypto investors might see it as a strong signal: that of a new bullish cycle fueled by distrust of traditional monetary policies.

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