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Posted on 05/23/2025 7:02:50 AM PDT by delta7
-Yields on 20- and 30-year U.S. Treasurys are trading above 5.1%, amid lingering uncertainty around the U.S. economy.
-One strategist told CNBC the U.S. is staring into an “emerging markets trap” as yields continue to rise.
-Some investors are looking to diversify their fixed income allocation to other parts of the world.
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“Historic Gold and Bitcoin buying bear this out,”
Bitcoin up 30% since your “sell” post last month at 85,000.
Never mind that in 2018 you saud to sell at $5.
No no no. It's the "lingering uncertainty around the U.S. economy". Get it?
Their thesis might have some weight if US rates were the only ones hitting new highs, but Japan, Germany, UK (basically everyone in the world other than a few EM countries) are seeing new highs in 30-yr yields.
Five percent is nothing for those who lived through the seventies and eighties.
“ Debt Death Spiral”.
Looks more like politics and people playing political games than economy to me. Trump’s policies appear to be making giant positive moves, and the investments are real, as well as the trade deals already made. I see freight trains and Semi’s moving goods, more so than late 2024, all suggesting the economy is waking up. Further, the rate of ‘increased debt’ by the US government slowed by roughly 90%+ since Biden left.
I actually have a good feeling about the economy, inflation is going to be low, people are going to be working, and I think it’s already growing.
Their thesis might have some weight if US rates were the only ones hitting new highs, but Japan, Germany, UK
——————-
ALL the world’s currencies are crashing in purchasing power. Nothing new, we are now entering just another economic cycle….big money fleeing Public debt and redirecting to Private markets…..the main driver for recession and depression.
Judging by the numbers, Japan fails first, then the EU…..hopefully the US makes it through with only a Recession. Exciting times for those watching.
Congress needs to do some real decreases in gov’t spending and the debt. If Trump did an EO that said the DOGE savings would be directly applied to the debt rather than being thrown back into the spending pool, the hand-wringing over the debt would subside.
I actually have a good feeling about the economy, inflation is going to be low, people are going to be working,
——————
Keep in mind, in times of war and economic troubles, the world moves money into the US, ( WW1, WW2). It has been estimated our DOW now has 35 percent plus of foreign money in it, and growing.
That said, the lack of buyers for US debt is a good thing. Less money for .gov to finance their forever wars, political agendas, day to day operations….government will have to shrink…” starving the beast”.
Less money for .gov to finance their forever wars, political agendas, day to day operations….government will have to shrink…” starving the beast”.
I am in for this
“Five percent is nothing for those who lived through the seventies and eighties.”
Banks and the fed have been buying treasuries. The first because it is safer then lending in the private market at this time, the second probably to help the treasury. In any case the price will and should be much higher. It is a debt trap.
That might be true in relative terms. But we did not have 39 trillion in debt back then. We need to roll over about 30% of the debt in the next year. A couple of points on the cost of the debt will bury us.
It’s OK to reminisce about “the good ole days.” But, the times have changed.
Here is a chart of the history:
https://www.macrotrends.net/2521/30-year-treasury-bond-rate-yield-chart
In the early 1980s the thirty year treasury peaked at 15%.
That would have been an amazing deal for investors at the time.
The debt is a major problem—but we are also on the verge of some incredible technological advances that could get the economy to explode on the upside.
(Of course people may be replaced by machines—so it may not be pleasant for many individuals.)
If you look at auto plants, the best job is robot repairman.
Five percent is nothing for those who lived through the seventies and eighties.
——————
I remember getting 16 percent interest in money market accounts, which was more than my mortgage rate of 12 percent or so…..and Gold went from $35 or so to $850….most suffered, a few prospered….it’s all about learning the economic cycles.
Better yet, Union Foreman for the robot line workers.
“If Trump did an EO that said the DOGE savings would be directly applied to the debt rather than being thrown back into the spending pool”
************
Unfortunately, Trump is a big spender. We’re closing in on $37T in debt and it seems inevitable that it will be $40T before long. DOGE had the potential to be a real game changer, but that opportunity appears to have been lost. Politicians will spend until they can’t and then they will raise our taxes to “fix” the problem.
“ for those who lived through the seventies and eighties.”
And that didn’t end well.
S&L crisis, farm economy tanked .
It wasn’t good
Great post!!!
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