Posted On: Wednesday - February 26th 2025 12:31PM MST
In Topics: Websites Global Financial Stupidity Economics
The post discussed here hearkens back to the old ZeroHedge roots, from when I'd read it thoroughly (all articles and comments, most days) a dozen years ago. They've branched out to all things politics since then, but I like the basics.
Of course, with ZeroHedge, there usually is a sales pitch somewhere. As I wrote in an old post, The Non-Science of Economics, ZH commenters would rightly rail against the system while still discussion how to make a buck within it. ZeroHedge's "Tyler Durden(s)" and others have always been gold/silver bugs, hence the hook in the headline and recent story Gold Revaluation: Solution Or Desperation?* However, precious metals are not the point as far as this post goes.
The writer here gets the Rock & Hard Place thing, the situation America's economy (along with many others around the world) is in. You make serious cuts to the budget, and, due to the near-irreversibility** of Socialism, people will be financially hurting. If you don't do that, you won't be able to pay off the debt, even as you struggle to by holding interest rates in the basement. Then, inflation happens, and people are financially hurting. Let rates rise, and the interest expenses rise to where, at some point, psychologically, everyone realizes the budget is a bust and the $ will become worthless. There's no easy way out - it's financial pain one way or another. Speaking of pain, yes, the horse is dead, so I'll stop.
Let me excerpt the boring part:
Boring Bond YieldsAlong with Mr. Piepenburg's Only Desperate Options Left (4 of them) and the case for gold, discussion of President Trump's role in all this follows. Trump's Treasury Secretary is one Scott Bessent. This writer reckons Mr. Bessent knows the score. "And deep down, Scott Bessent (a private gold buyer) knows this, too." What can he do? What can Trump do, even if he did have his own ideas on the matter? It's musical chairs (ahhh, an old-timey ZH theme). Sooner or later the music will stop, and the President, the guy standing, will get the blame. Why should he stop the music himself, by not continuing to contain interest rates in the basement?
Given that the USA in particular (and the world in general) is witnessing the greatest debt crisis of human history, should we not be equally concerned rather than politically divided when it comes to such boring things like bond yields (which reflect the very cost of debt)?
As for those boring bond yields, let’s just keep it broad and simple.
Yields on the 10-year U.S. Treasury represent the cost of money/debt for nearly everyone on the globe, in general and Uncle Sam in particular.
This means that when those yields start to climb too high, just about everything and everyone (including the country you reside in) starts to fall deeper into “uh-oh.”
And those yields rise when demand (i.e., purchasing) of those bonds starts to fall.
Read that last line again. Let it sink in.
When trust, love and/or demand and price for UST’s falls, pain for just about everything but the USD (and now gold) spikes.
Boring? Yes.
But relevant?
Absolutely.
From Boring Bonds to Just About Everything
So, what does such boring bond/UST talk have to do with your currency, your wealth or your lives?
And what does such boring bond talk have to do with market risk, gold prices, BTC’s direction or the fate of Trump’s America or even world trade and peace?
A lot.
DOGE may make bigger inroads than I have ever imagined, or CAN, imagine, but, no. We're between a rock and a hard place. If you can't get what Peak Stupidity has been preaching here, that great ZeroHedge article explains it pretty simply and concisely . And, of course, Gold, Bitchez!
Actual final words: "So, yes, gold gets the last laugh – but the circumstances couldn’t be sadder." Yep.
PS: The Immigration Invasion is the biggest and most important issue for President Trump to work on. I agree with Mr. Hail on this, but we don't agree on how much good Trump has been doing, coming up to Week 6. Please see the latest and greatest Hail To You post with Mr. Hail's viewpoint of Donald Trump as El Caudrillo Yanqui***. I'll write more on his post and Trump's efforts shortly, but back to Climate stupidity and a few other flavors too.
* This post comes originally from one Matthew Piepenburg of VonGreyerz.gold.
** Socialism increases entropy, let me put it that way.
*** The actual post title is The Trump-as-Caudillo theory revisited: Fighting Third Worldization through another form of Third Worldization?.
Comments:
Moderator
Thursday - February 27th 2025 6:55PM MST
PS: You probably know that I'm not the investor type, Alarmist. What's going on with gold, the possible audit is getting VERY interesting though. I'll write back more later tonight - gotta still edit the recent post.
The Alarmist
Thursday - February 27th 2025 1:54PM MST
PS
Sure, bonds used to be boring, but we’ve had a number of outlandish one-day multi-sigma moves the past few years. By comparison, equities have been ho-hum, and gold has been downright disappointing... until recently.
It seems the rats in the LBMA have written a lot of paper against the gold they claim to have in their vaults, and now everyone is getting nervous that the T+62 settlent of spot trades ... yeah, you read that right ... 62 days to deliver ... means the gold might not be there. Everybody and their brother who kept (yeah, kept) their gold in London have been busy bees getting it out of the UK and into the US, which, relatively speaking, is a safer haven. So much so that the recent outflows to China have been dwarfed.
The UK bet the show on the Ukraine, then Mr. Trump pulled the rug out from under the UK and EU by backing away from further support. Also, now listening to Mr. Trump admit there might not even be a peace in Ukraine means he has awakened to the fact that the US has no leverage over Russia and any deal will be on Mr. Putin’s terms. Mr. Starmer just gave Mr. Trump the bust of Churchill ... rat bastard knows how to play the Bad Orange Man.
Buy more gold now.
🕉
Sure, bonds used to be boring, but we’ve had a number of outlandish one-day multi-sigma moves the past few years. By comparison, equities have been ho-hum, and gold has been downright disappointing... until recently.
It seems the rats in the LBMA have written a lot of paper against the gold they claim to have in their vaults, and now everyone is getting nervous that the T+62 settlent of spot trades ... yeah, you read that right ... 62 days to deliver ... means the gold might not be there. Everybody and their brother who kept (yeah, kept) their gold in London have been busy bees getting it out of the UK and into the US, which, relatively speaking, is a safer haven. So much so that the recent outflows to China have been dwarfed.
The UK bet the show on the Ukraine, then Mr. Trump pulled the rug out from under the UK and EU by backing away from further support. Also, now listening to Mr. Trump admit there might not even be a peace in Ukraine means he has awakened to the fact that the US has no leverage over Russia and any deal will be on Mr. Putin’s terms. Mr. Starmer just gave Mr. Trump the bust of Churchill ... rat bastard knows how to play the Bad Orange Man.
Buy more gold now.
🕉
Is it about economics? I figured the Germans and others want that Russian natural gas, right? Or is this just that the whole facade of NATO as protector of the West and all the money that goes with it is being smashed by Trump?
Anyway, aren't Putin's terms pretty close to what Trump is fine with, at this point?