The Silent Revolution No One is Talking About

BY BILL GRIFFO

November 17, 2025

Hey Income Hunters,

While the media chases AI breakthroughs and election sound bites, a quieter revolution is rewiring the plumbing of global finance.

This isn’t about new technologies — it’s about who’s allowed to use them.

The U.S. is undergoing a once-in-a-generation deregulation wave in its financial and payment systems — comparable to Franklin Roosevelt’s overhaul of banking in the 1930s.

The difference? Back then, regulation created walls to protect the public. Today’s deregulation is tearing them down.

Banks, investors, and digital platforms are now connecting through tokenization, private credit, and blockchain rails that move money faster, further, and with fewer gatekeepers.

The New Financial Order

For most of the post-2008 era, we lived under the “Too Big to Fail” regime — heavy oversight, low leverage, and centralized liquidity.

Then came the triple shock:

COVID fiscal expansion flooded markets with cash.
Zero rates pushed investors out the risk curve.
Tech innovation — tokenization, blockchain, and private lending platforms — allowed capital to flow outside traditional channels.

The result? A shadow financial system now bigger than the one regulators tried to contain.

Private credit, tokenized assets, and digital payments are taking over roles once reserved for banks. And that means the next cycle won’t look like the last.

Private Credit: The New Wall Street

When banks pulled back after 2008, lending didn’t stop — it just moved.

Private credit funds, direct lenders, and BDCs (business development companies) now provide hundreds of billions in loans to middle-market companies.

However, so much lending since the financial crisis has been supported by private markets that the rest of us have no idea what’s going on there.

Business Development Companies (BDC) are the new Canary in a Coal Mine

Publicly traded BDCs are the one window into this opaque market.

When confidence is high, they trade at a premium to book value. When fear creeps in, they fall 20–25% below it.

That’s your escape valve — and your opportunity.

A must watch risk measure: BDC premium/discount measure to net asset value (NAV) is now a must watch indicator.

Notice in the graph above how the BDC measure was flashing red as it dropped to -20% below NAV.

The following year stocks and bonds trended down during one of the worst years for financial assets. Power Income will send an alert out when/if this reading hits -20% for worse.

Tokenization and the Digitization of Finance

While private credit grows in the shadows, tokenization is unfolding in plain sight.

Goldman Sachs, BNY Mellon, and JPMorgan are now offering tokenized Treasuries and money market funds on private blockchains — the same trend we discussed in “Digital Dollars on the Rise”.

These aren’t crypto gambles — they’re compliant, dollar-backed tokens representing real financial assets that move 24/7 and settle instantly.

It’s deregulation without saying the word — faster, cheaper, and global by design.

The same dollar can now live on both Wall Street and the blockchain.

That’s the real revolution. Check out the explosive trend higher in Tokenized Assets (gold line) in the chart below.

Yes, traditional bank assets continue growing higher … But the reason for that is all the additional supply of US Treasury securities to support the debt.

If the banks suffer losses during a recession they may turn into sellers of bonds to support their businesses.

The bottom line:

Tokenization and private credit have become backdoor liquidity engines when Washington can’t openly do QE.

The market, not the Fed, is now creating liquidity — and that can keep asset prices aloft far longer than fundamentals justify.

But when synthetic liquidity dries up, reversals can be violent.

Risks to Watch for

Policy Whiplash: Regulators can reverse course overnight.
Liquidity Crunch: Synthetic markets can freeze fast.
Political Blowback: Rising inequality could bring re-regulation.
Tech Fragility: Blockchain hacks or operational failures could ripple into real-world losses.

Deregulation means more velocity — and more fragility.

Opportunities to Prepare for

Look to buy BDCs and private credit — add aggressively if discounts widen past 20%.

FS KKR (FSK) offers a significantly discounted valuation to NAV. It is currently in the 20-30% discount range.

It offers a high dividend yield (~12%) which boosts its income appeal…

Commentary (e.g., at WallStreetWaves) point out that while other “safer” BDCs trade at premiums (making them expensive), FSK offers a larger margin of safety.

High yield often implies higher risk. FSK offers a higher reward but requires you to be comfortable with the risk.

If you’re more conservative, pick the second-best option: Golub Capital BDC, Inc. (GBDC) — decent yield (~11%) and trades at a 6% discount to NAV according to bdcnvestor.com