Unexpectedly, this time a huge turmoil occurred in the Middle East, which directly caused the US bond market to collapse.
The ten-year U.S. Treasury bond yield directly exceeded 5%. This is the first time since July 20, 2007 that the U.S. Treasury bond yield has exceeded 5%. After 2007 came 2008. In 2008, the subprime mortgage crisis occurred, which brought the global economy to its knees. Under the slogan of bailout, the United States embarked on quantitative easing for the first time, dropping money from helicopters, and completely let itself go.
Printing money is like domestic violence. Once you do it once, it will happen countless times, and the frequency will become more and more intensive, and the attacks will become more and more ruthless.
In the 1970s, the gold dollar went bankrupt, and in the 2020s, we will see the petrodollar go bankrupt.
Because the United States has fallen into serious internal strife, the establishment faction that could have been in harmony with each other has been jointly pursued by the extreme left and the extreme right. Political divisions and struggles have become more and more intense. Party disputes are higher than national interests. Gradually no one will go. No matter what the long-term interests of the United States are.
Before the Federal Reserve raised interest rates, the long-term and short-term inversion of U.S. Treasury bonds was very serious, which is easy to understand.
In a high-debt environment, it is impossible to have long-term high interest rates. Once they do, it means there is something wrong with the currency. To put it simply, the United States owes too much, and the interest rates are too high, and the economy will collapse. The only way to maintain high interest rates despite fiscal collapse is to maintain the status of the domestic currency.
When the time comes when the U.S. dollar really needs to deliberately maintain its status, can the U.S. dollar still be regarded as an international power currency?
Therefore, before the U.S. dollar can maintain its actual strength, long-term funds are betting that the United States will soon curb inflation and return to the status of a strong U.S. dollar. Once successful, it will immediately enter the era of 0 interest rates or even negative interest rates, so long-term bond interest rates will not rise much.
Short-term interest rates are affected by the Federal Reserve’s interest rate policy, but long-term and short-term interest rates represent the views of mainstream international long-term funds on the future prospects of the US dollar.
The chart above is a chart of the 10-year U.S. Treasury yield.
After reaching a stage high in October last year, U.S. bond yields began to rise again in early May after consolidating for seven months.
So what exactly happened in May?
Do you still remember the U.S. debt ceiling and the risk of U.S. Treasury defaults that caused a stir in the market at that time?
At the last minute, the U.S. Congress lifted the debt ceiling.
The debt ceiling can be lifted, but the U.S. national fiscal revenue cannot improve. The internal strife between the two parties means that the only option is to print more money to bribe various political forces in order to maintain superficial peace.
The more intense the internal strife becomes, the more serious the fiscal deficit becomes.
If things go on like this, the money printing machine will not be able to cover the huge fiscal gap in the United States. The less optimistic market funds are about the United States’ ability to fulfill its obligations in 10 years, the higher the long-term U.S. bond yields will soar.
If the problem in the United States is only serious party strife, then it would be okay to say that the hegemony is there after all. The party strife lasted for so long in the middle and late Ming Dynasty, and finally it lasted for nearly a hundred years before it was completely over.
But when external and internal troubles come together, that’s another story.
By June, the price of crude oil began to be unbearable, and international commodities rose sharply.
The excuse for raising interest rates in the United States is inflation. In the past, whenever the Fed shouted slogans, OPCE+ would be busy increasing production and controlling oil prices, exporting deflation to the world. You can review the trend of international oil prices starting in 2014.
This wave of international oil prices is not obedient at all, which also means that the United States cannot control the oil countries, and the corners of the petrodollar have been dug to pieces. Without oil, what else can maintain the dollar’s international currency status?
Is it really a good thing that the long-term and short-term inversion of U.S. debt has been repaired?
After short-term interest rates were raised so high by the Federal Reserve policy, the market actually believed that in the long run, the US dollar would completely lose its control over global prices, and could only maintain its position by relying on the wealth effect of high interest rates to attract reserves.
I used to think that this wave of U.S. debt short sellers had taken control of the Federal Reserve and made a fool of themselves in order to smooth their positions.
There may be efforts on the part of the bears, but it’s also possible that the problem is more serious than that.
The short side originally just wanted to launch a false attack to scare people, but in the end it was discovered that the bull side was actually making false plans, so the false attack turned into a real attack. Now there are rumors in the market that the 10-year U.S. Treasury bond interest rate may exceed 6 %.
I saw some idiots online saying that they should sell it quickly and buy U.S. bonds together.
Is high yield a good thing? Are the so-called risk-free U.S. bonds really risk-free?
The U.S. national debt continues to soar, the U.S. fiscal deficit is increasing, and it is basically unable to make ends meet. If this is not the U.S. fiscal situation, but your neighbor’s personal financial situation, would you still dare to lend money to your neighbor?
The reason why everyone can still maintain blind trust is not because of the good financial situation of the United States, but because of the solid hegemony of the United States.
This wave of corrupt and dim-witted old Biden has directly led the United States into the quagmire of the Middle East. Israel is basically red-eyed and has to risk the world’s disapproval to launch a massacre against Palestine.
Even the Jewish groups in the United States are frightened and are looking for ways to cut themselves off from Israel. However, Biden has to lock down Israel in order to retain his re-election.
Now Israel does not have any decent military power at all. There are no more than 50,000 people who can actually fight. The rest are recruited from reserve forces. Where can they get any reliable training? Once the scale of the war really expands, the United States will have no choice but to end it personally.
By then, the Middle East will be in chaos, and oil and the U.S. dollar will soon become enemies. Even if the petrodollar system can barely maintain its dignity, who can hold back the skyrocketing international oil prices?
It seems that the U.S. inflation target has not been reached, which has led to the inability to stop raising interest rates. In fact, the status of the U.S. dollar has been stabbed by the oil countries, and it has fallen into a currency crisis. It has no choice but to play the most shameless way of collecting reserves at high interest rates.
The result of collecting savings at high interest rates is that you are interested in other people’s interest rates, and others are interested in your principal.
This time the U.S. debt crisis is not that simple. With the combination of stocks and bonds, the world financial order is expected to be rewritten.
It may take generations of unremitting efforts to build an empire, but it may literally come down in an instant.
Whoever advises you to buy U.S. bonds for financial management at this time is a bastard. This is as disgusting as tricking you into playing P2P.
The most dangerous group of people now are those who commit original sin and think that they can live a good life by taking money to the United States. The United States usually lives a very good life, and the financial Ponzi scheme is maintained smoothly, and others will follow you. Let’s talk about the so-called “private property is sacred and inviolable” and trick you into realizing the freedom of wealth.
Once these people have a hard time and the Ponzi scheme collapses, you can see how they behave at that time. They can disclose that Israel is engaged in mass murder and support Nazi activities in Ukraine. This shows that there is no bottom line and that is their moral bottom line.
When the time comes, the guilty party will rob the rich. Compared with the Jews who work together to control the country, the stupid people will seem to be easier to squeeze.
Syngenta’s real estate in the United States has begun to be robbed openly. Why, do you really think anyone will support Runren’s private wealth?
Money has always attracted people’s hearts, especially money with original sin, which is tantamount to running naked. Isn’t this coveted?
Under the general trend, individual efforts are insignificant, just wait and witness history.