Originally published at: Henry Paulson Warns of ‘Vicious’ Treasury Crisis as UAE Hints at Yuan Oil Sales Amid Iran War – Peak Prosperity
Economy
The United Arab Emirates has held discussions with US Treasury Secretary Scott Bessent and Federal Reserve officials on establishing a dollar swap line as a precautionary measure amid economic pressures from the Iran conflict, according to reports. Emirati Central Bank Governor Khaled Mohamed Balama raised the proposal in recent Washington meetings, citing conflict-related damage to oil and gas infrastructure and disruptions in the Strait of Hormuz that have strained dollar revenues. No formal request has been submitted. Officials noted UAE concerns over potential reserve depletion and investor outflows, with warnings that dollar shortages could prompt oil transactions in Chinese yuan or other currencies. However, some analysts described the move as routine financial access for the UAE, a major holder of US Treasuries, allowing collateral-based dollar draws without asset sales that could unsettle markets. The Fed generally limits swaps to key partners but has offered Treasury-mediated alternatives, as in Argentina. CFR senior fellow Brad Setser questioned the urgency of the request, citing the UAE’s substantial reserves and liquid US assets.
Former Treasury Secretary Henry Paulson warned in a Bloomberg interview of a potential “vicious” emergency in the Treasury market as US federal debt approaches $39 trillion. He cautioned that waning foreign demand and falling prices could erode confidence, calling for an emergency “break-the-glass” plan with Federal Reserve intervention as buyer of last resort via quantitative easing. Paulson emphasized risks of a disorderly adjustment cascading globally, given Treasuries’ role in collateral systems and dollar reserve status. The Paulson Institute described media portrayals of an imminent bond market crash as inaccurate and misleading.
Geopolitics
Iran has rejected a second round of Pakistan-hosted peace talks, citing US “unrealistic” nuclear demands, shifting positions, and the naval blockade as ceasefire violations. President Trump sent Vice President JD Vance, envoy Steve Witkoff, and Jared Kushner, who demanded Iran surrender enriched uranium stocks—described as “nuclear dust”—buried after strikes for joint recovery, separate from Lebanon issues where Israel has halted bombings.
In another development, the USS Spruance fired on and disabled the engine room of the Iranian cargo ship Touska in the Gulf of Oman after it ignored warnings. US Marines boarded the sanctioned vessel to inspect cargo as the two-week ceasefire nears expiration.
Additionally, the US Navy has deployed unmanned surface vessels, including RTX’s Common Uncrewed Surface Vessel towing AQS-20 sonar, and battery-powered submarine drones such as General Dynamics’ MK18 Mod 2 Kingfish and Knifefish, to detect Iranian mines in the Strait of Hormuz despite Iran’s temporary closure. These systems scan wide areas with reduced risk of loss, amid a US naval presence and ongoing talks with Tehran. Clearing trapped tankers and restoring Gulf energy assets, including Qatar LNG, could take weeks to years.
Artificial Intelligence
Chinese firm DeepSeek plans to launch V4, transitioning fully from NVIDIA’s CUDA to Huawei’s CANN framework on Ascend chips. Reports claim 35 times faster inference than early versions, nearly triple H20 performance per card, and 40% less energy use with over 95% compatibility for migration. The shift supports a domestic AI stack—chips, frameworks, models, applications—with Alibaba, ByteDance, and Tencent ordering hundreds of thousands of Ascends, raising Huawei’s domestic market share to 41% from NVIDIA’s 55%. DeepSeek’s API costs are reported at $300 for workloads exceeding $2,500 on OpenAI or $5,000 on Anthropic models. Some online commentators have dismissed leaked performance benchmarks for V4 as fabricated.
Health
Systematic reviews of 14 randomized trials covering over 21,000 deaths found general health checks in adults produced no reductions in total, cardiovascular, or cancer mortality, nor in morbidity, hospital admissions, or clinical events. The reviews noted increases in disease labeling, antihypertensive prescriptions, and psychological issues from overdiagnosis of self-resolving conditions, which outweighed benefits such as lifestyle advice available opportunistically.
Denmark faced opposition to implementing checks after these findings, citing cost savings despite pharmaceutical lobbying and reliance on smaller trials or surrogate outcomes. The UK NHS health checks program retreated from promises of preventing deaths and diseases amid evidence, with attendance at 50% despite calls for 70-75%. Mammography was cited as detecting late-stage cancers without mortality benefits, leading to more mastectomies. Geriatric multifactorial interventions showed promise but differ from broad screening; reviews recommended abandoning general checks. However, some maintain that routine screenings can detect diseases early and reduce morbidity.
European Politics
Polls project Bulgaria’s pro-Russian former President Rumen Radev and his Progressive Bulgaria coalition at 44% in parliamentary elections, ahead of GERB’s 12.5%, potentially resolving eight elections in five years of instability. Radev, a eurosceptic ex-fighter pilot who opposes Ukraine aid, campaigned on frustration with corruption, veteran parties, and euro adoption costs amid protests that toppled the prior government. Turnout reached 47%. Radev pledged judicial reform cooperation, a possible minority government, continued EU path with pragmatism, improved Moscow ties, Russian energy resumption, and critiques of EU renewables. GERB leader Boyko Borissov said governing requires negotiations. Bulgaria, a NATO and recent EU member, lags EU peers despite post-1989 gains. Critics have warned of risks to EU and NATO unity due to Radev’s euroscepticism and Moscow ties.
Butler Shooting
Former Congresswoman Marjorie Taylor Greene has echoed doubts raised by Trisha Hope, a former Trump supporter, January 6 activist, and 2024 RNC delegate, regarding the July 13, 2024, assassination attempt on Donald Trump at a Butler, Pennsylvania, rally. Hope questioned the brevity of Trump’s RNC speech on the incident, the timing of the fist-raised photo with flag and agents, Trump’s reported lack of aggressive pursuit of security failures after inauguration, and the promotion of Secret Service agent Sean Curran—seen in a white shirt—to agency head on January 22, 2025. Hope also referenced Corey Comperatore’s death as adding credibility to the event, limited Trump mentions beyond “taking a bullet,” rapid FBI hosing of the rooftop, and pre-shooting police sightings of gunman Thomas Matthew Crooks without evacuating the stage. Official accounts state Crooks acted alone; the FBI confirmed he fired eight AR-15 rounds that grazed Trump, killed Comperatore as he shielded his family, injured two others, amid security lapses in communications and access. Critics have labeled these doubts as conspiracy theories.
Sources
UAE to US: Dollar Swap Lines or We’ll Sell Oil in Yuan
You started this war; if we run short of USDs as a result of it, either you will give us USD swap lines, or we will be forced to start transacting oil and gas in CNY and other currencies.
Source (Paywalled)
Marjorie Taylor Greene Boosts Ex-MAGA Doubts on Butler Assassination Attempt
President Trump, of all people, should be leading the charge. Why isn’t he? That’s the question.
Paulson Warns of Treasury Market Emergency
“It will be vicious.”
U.S. Navy Deploys Sea Robots to Hunt Iranian Mines in Hormuz Strait
U.S. Navy Deploys Sea Robots To Sweep Hormuz Chokepoint For Mines
General Health Checks: A Costly Farce That Harms More Than Helps
General health checks are unlikely to be beneficial, but in fact they are harmful.
Iran Rejects Second Pakistan Talks Over “Unrealistic” US Nuclear Demands
the US has “unrealistic demands” that make attendance at the summit pointless
US Navy Blasts Hole in Iranian Cargo Ship Defying Blockade
US Navy Blows Hole in Iranian Cargo Ship Attempting To Break Blockade
DeepSeek V4: NVIDIA’s “Terrifying” Reckoning as China Builds CUDA-Free AI Empire
It’s about China building a fully independent AI stack, chips, frameworks, models, and applications. Completely outside of US control.
UAE’s Fed Swap Request: No Dollar Doom, Just Smarter Plumbing
So no, this isn’t a pivot away from the dollar, it’s a major dollar holder asking for a cleaner, more direct line into the dollar system so it doesn’t have to destabilize it by selling Treasuries or Dirhams.
Bulgaria’s Pro-Russian Ex-President Radev Set for Landslide Win
Bulgaria’s pro-Russian former President Rumen Radev was set for a runaway victory in the election
In addition to sources submitted by community members, the following were also used in the creation of this report: Wall Street Journal, Brad Setser / CFR, Bloomberg, Paulson Institute, Breitbart News, Daily Mail, Laura Loomer, PressTV, Chris Murphy, Brownstone Institute, MikeKon219 et al., @anneshu_nag et al., Politico.eu, @TheEuropeansHQ.