📊 The U.S. is $40 trillion in debt. The 30-year Treasury yield has surged to a 19-year high.
This week, U.S. Treasuries have broken through $40 trillion. A fiscal alarm has been sounded.
Long-term borrowing costs are surging too. The 30-year Treasury yield is now above 5.3%, the highest since 2007—meaning 19 years. The 10-year is also up to 4.7%. The bond market is grading Washington, and the score is very low.
The strange part is gold. With yields this high, gold should have been falling. On August 21, London gold instead rose nearly 2%, to $4,604. As the dollar weakens, it offsets the pressure from high yields. Gold and bonds both went up together—this kind of decoupling is rarely seen.
This points to one thing: the market is starting to reprice the dollar and U.S. Treasuries. With $40 trillion worth of debt, interest costs compound faster and faster, and people begin looking for assets that don’t carry sovereign credit risk.
Bitcoin sits right in this window. It’s up 22% over the past 7 days and is now at $76,923. Previously, it was riding the narrative of rate cuts, but now the people at the Fed are still calling for rate hikes. Liquidity hasn’t loosened. What’s pushing this move is credit risk concerns around the dollar. People don’t trust the dollar anymore, so they’re hiding in assets that are considered to have little or no sovereign risk.
Also, we should talk about risk. A 5.3% yield comes with a cost. High interest rates are a headwind for risk assets. At this level, not many are willing to carry the banner for Bitcoin.
$BTC
#中本聪国际社区Baoluo币商资本 #宏观经济 #美债
This week, U.S. Treasuries have broken through $40 trillion. A fiscal alarm has been sounded.
Long-term borrowing costs are surging too. The 30-year Treasury yield is now above 5.3%, the highest since 2007—meaning 19 years. The 10-year is also up to 4.7%. The bond market is grading Washington, and the score is very low.
The strange part is gold. With yields this high, gold should have been falling. On August 21, London gold instead rose nearly 2%, to $4,604. As the dollar weakens, it offsets the pressure from high yields. Gold and bonds both went up together—this kind of decoupling is rarely seen.
This points to one thing: the market is starting to reprice the dollar and U.S. Treasuries. With $40 trillion worth of debt, interest costs compound faster and faster, and people begin looking for assets that don’t carry sovereign credit risk.
Bitcoin sits right in this window. It’s up 22% over the past 7 days and is now at $76,923. Previously, it was riding the narrative of rate cuts, but now the people at the Fed are still calling for rate hikes. Liquidity hasn’t loosened. What’s pushing this move is credit risk concerns around the dollar. People don’t trust the dollar anymore, so they’re hiding in assets that are considered to have little or no sovereign risk.
Also, we should talk about risk. A 5.3% yield comes with a cost. High interest rates are a headwind for risk assets. At this level, not many are willing to carry the banner for Bitcoin.
$BTC
#中本聪国际社区Baoluo币商资本 #宏观经济 #美债