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Who Wants To Loan ‘The King Of Debt’ Some Money?
This week was all about bonds, and specifically US Treasurys.
Although the US long-end managed to s
Curious how Trump and Bessent could express that caving, though.
Would Trump upend his BBB progress by suddenly demanding less spending and/or more revenue? Isn’t the X date in August?
Would Trump retreat again on tariffs? More 90 day pauses?
Would Bessent do something with QRA, tilt issuance even more toward bills? I’m unclear on what the constraints on that may be.
I was just debating with a friend about the dollar. Here’s the rub: the dollar may be oversold. It may ‘bounce’ but structurally we are where we are for reasons that are not ‘bouncing.’ A tactical/technical bounce can certainly happen, but nothing is really changing to shore up confidence. At some point, the RoW will grow accustomed to the U.S. being an untrustworthy basket case and will have moved on from Pax Americana to something else that is forming out of the ashes. A Phoenix or a demon.
A dragon.
There’s talk, whispers and rumors about crypto as a reserve currency. That may be idiocy, but that puts it right in Trumps wheelhouse. Might have been Musk who was talking this week about tokenization being key to the global financial future so some kid in Africa who had $2.38 could by some Apple stock. I still can’t imagine crypto as anything other than a casino game, perhaps that makes me a big loser since I don’t have a bulging crypto wallet.
I rather like this situation. Prices down => yields up. I reinvest 25% or more of my monthly earnings in new stuff. Right now new stuff is insured/protected IG muni bonds paying 5.0-5.25% nominal interest with no imminent call features. Right now nearly half my investment earnings are tax-exempt and giving me nominal returns of 7.25% equivalent yields. At the current rates I’ll be locked in until I’m dead. Three more years of silly Donald of the very tiny hands and me and my family will be set for a long time.
The problem is that 80% of society is paying 18% to 30% for money. They are getting screwed every day by the financial system. When Bissent and Trump and others are known liars and cheats who is going to accept their plight. Not me. I wouldn’t and someone is going to knock this U.S. edifice down,