Treasuries and stocks heading down in tandem

[Anonymous]

Anonymous wrote:Bitcoin is up big!

This is mainly because the dollar has dropped in value.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Bitcoin is up big!

This is mainly because the dollar has dropped in value.

This is by design.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are heading towards a calamity unless Congress starts doing its job, which is extremely unlikely. At this point, the only way to avoid a yield-debt spiral (in which yields rise as debt rises, making service more and more unaffordable, eventually driving the country to insolvency) is massive austerity. This means tax increases across the board plus entitlement reform, which will deepen the current recession but prevent total fiscal and monetary collapse. Note that the current bill does the opposite. So, what will happen over the coming months and years? Yields will continue to climb, driving up borrowing costs and depressing economic activity. Note this is on top of the tariffs. Each 90 days, more debt will be issued at ever higher rates to pay for debt service, driving yields ever higher. At some point, the Treasury will start to print money (rather than enact austerity.) This will trigger both double-digit inflation and much higher yields--think 20%+. The Fed will no longer have any influence over rates. Existing debt holders will make out like bandits as the real value of their principal falls. However, the savings of pretty much every retiree and future retiree will be wiped out. We will enter a depression that only true leadership will get us out of. This is all a very real scenario, folks. Just because it hasn't happened here for eighty years doesn't mean it won't. There's nothing magical about the United States, certainly with our government no longer functioning in any real way.

You aren’t looking at history.

We are beefing up our “War Department “ budget.

Long before that calamity happens, we are conquering some countries and adding them to our balance sheet and incorporating their GDP into ours, meanwhile I believe we will wipe out their debt since the country that owes it no longer exists? Not sure about that last bit.

There hasn’t been a War Department in decades. Stupid boomer.

Hence the quotes, are you drunk?

The point was the purpose of the Dept of Defense will be shifting to a more adversarial position, with preemption and territorial expansion goals. Already alluded to by North American acquisitions in recent news.

[Anonymous]

Anonymous wrote:We are heading towards a calamity unless Congress starts doing its job, which is extremely unlikely. At this point, the only way to avoid a yield-debt spiral (in which yields rise as debt rises, making service more and more unaffordable, eventually driving the country to insolvency) is massive austerity. This means tax increases across the board plus entitlement reform, which will deepen the current recession but prevent total fiscal and monetary collapse. Note that the current bill does the opposite. So, what will happen over the coming months and years? Yields will continue to climb, driving up borrowing costs and depressing economic activity. Note this is on top of the tariffs. Each 90 days, more debt will be issued at ever higher rates to pay for debt service, driving yields ever higher. At some point, the Treasury will start to print money (rather than enact austerity.) This will trigger both double-digit inflation and much higher yields--think 20%+. The Fed will no longer have any influence over rates. Existing debt holders will make out like bandits as the real value of their principal falls. However, the savings of pretty much every retiree and future retiree will be wiped out. We will enter a depression that only true leadership will get us out of. This is all a very real scenario, folks. Just because it hasn't happened here for eighty years doesn't mean it won't. There's nothing magical about the United States, certainly with our government no longer functioning in any real way.

Well. The reckless GOP house of representatives just took us another step closer to this scenario and the bond markets were not happy. Congress seems to think someone else will save the day.

We’re screwed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are heading towards a calamity unless Congress starts doing its job, which is extremely unlikely. At this point, the only way to avoid a yield-debt spiral (in which yields rise as debt rises, making service more and more unaffordable, eventually driving the country to insolvency) is massive austerity. This means tax increases across the board plus entitlement reform, which will deepen the current recession but prevent total fiscal and monetary collapse. Note that the current bill does the opposite. So, what will happen over the coming months and years? Yields will continue to climb, driving up borrowing costs and depressing economic activity. Note this is on top of the tariffs. Each 90 days, more debt will be issued at ever higher rates to pay for debt service, driving yields ever higher. At some point, the Treasury will start to print money (rather than enact austerity.) This will trigger both double-digit inflation and much higher yields--think 20%+. The Fed will no longer have any influence over rates. Existing debt holders will make out like bandits as the real value of their principal falls. However, the savings of pretty much every retiree and future retiree will be wiped out. We will enter a depression that only true leadership will get us out of. This is all a very real scenario, folks. Just because it hasn't happened here for eighty years doesn't mean it won't. There's nothing magical about the United States, certainly with our government no longer functioning in any real way.

You aren’t looking at history.

We are beefing up our “War Department “ budget.

Long before that calamity happens, we are conquering some countries and adding them to our balance sheet and incorporating their GDP into ours, meanwhile I believe we will wipe out their debt since the country that owes it no longer exists? Not sure about that last bit.

There hasn’t been a War Department in decades. Stupid boomer.

Or more likely someone from another country who is trolling the board and doesn't know the US lingo.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are heading towards a calamity unless Congress starts doing its job, which is extremely unlikely. At this point, the only way to avoid a yield-debt spiral (in which yields rise as debt rises, making service more and more unaffordable, eventually driving the country to insolvency) is massive austerity. This means tax increases across the board plus entitlement reform, which will deepen the current recession but prevent total fiscal and monetary collapse. Note that the current bill does the opposite. So, what will happen over the coming months and years? Yields will continue to climb, driving up borrowing costs and depressing economic activity. Note this is on top of the tariffs. Each 90 days, more debt will be issued at ever higher rates to pay for debt service, driving yields ever higher. At some point, the Treasury will start to print money (rather than enact austerity.) This will trigger both double-digit inflation and much higher yields--think 20%+. The Fed will no longer have any influence over rates. Existing debt holders will make out like bandits as the real value of their principal falls. However, the savings of pretty much every retiree and future retiree will be wiped out. We will enter a depression that only true leadership will get us out of. This is all a very real scenario, folks. Just because it hasn't happened here for eighty years doesn't mean it won't. There's nothing magical about the United States, certainly with our government no longer functioning in any real way.

Well. The reckless GOP house of representatives just took us another step closer to this scenario and the bond markets were not happy. Congress seems to think someone else will save the day.

We’re screwed.

Not the insiders! They sold off 2 months ago!

https://newrepublic.com/post/195610/dozen-officials-dumped-stocks-just-trump-crashed-market

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Bitcoin is up big!

This is mainly because the dollar has dropped in value.

This is by design.

No accident that Trump is the first president to have his own meme coin. And that Chinese firms are buying access to POTUS by buying them up in a big way.

[Anonymous]

From Nobel prize winning economist Paul Krugman's newsletter. I can't include the graphs he shares, but it's a scary scenario he's describing.

I wrote a month ago about the possibility of a sudden stop for the United States. Despite growing pressure on both U.S. interest rates and the dollar, we aren’t there yet. I was, however, a disciple of the late, great Rudiger Dornbusch, whose students often quote Dornbusch’s Law:

The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.

So a U.S. sudden stop still looks quite possible, indeed considerably more likely given the grotesquely cruel and irresponsible budget bill Republicans are trying to ram through. It doesn’t help that key players are being utterly dishonest about what they’re doing: House Republicans have been denying that the bill will increase the budget deficit, while Trump claims that “We’re not touching anything” on Medicaid, just eliminating waste, fraud and abuse (and somehow taking away health care for millions in the process.) Low-information voters may be fooled for a little while, but bond markets won’t.

But while I’ve already written about the possibility of a sudden stop, I haven’t said much about what such a stop, if it happens, would look like. So let’s game it out.

The starting point here is the fact that the United States runs persistent, large trade deficits:

We’ve been able to cover these deficits painlessly because the world has been eager to invest in America, with large inflows of capital matching our deficit in goods and services. One consequence of decades of capital inflows, however, is that America owes a lot of money to the rest of the world. Here’s our net international investment position, the difference between U.S. assets abroad and foreign assets here, shown as a percentage of GDP:

That’s a lot of U.S. debt held by foreigners! It hasn’t been a problem in the past because foreign investors have considered America a good place to put their money. But what happens if they change their minds?

A footnote: official numbers almost certainly understate how much America pays out each year to foreign investors, because of tax avoidance. Multinational corporations that earn profits in the United States use strategies like fictitious pricing and transfers of intellectual property to make those profits disappear here and reappear in low-tax countries like Ireland.

But the important point for now is that we have a big trade deficit covered by large inflows of capital, which in turn reflect the fact that foreign investors have considered America a good place to put their money.

And the question is what happens if investors change their minds — if they decide that we’re an unserious country in which the governing party believes in voodoo economics and the president is an authoritarian ruler who spends much of his time rage-tweeting about popular musicians.

A sudden stop to capital flows into America would mean that there would no longer be money to cover those big trade deficits — and this would mean a sharp drop in the foreign exchange value of the dollar. On the eve of its 2001 sudden-stop crisis Argentina had a trade deficit, as a share of GDP, similar to that of the United States now — and when the crisis hit the peso lost more than half its value. A U.S. sudden stop would probably be less severe because our foreign debts are overwhelmingly in dollars, which insulates us from some of the fallout Argentina faced. Still, this could be ugly.

The impact on interest rates could be especially ugly. The United States relies on inflows of capital from abroad to pay for a significant part of domestic investment spending.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are heading towards a calamity unless Congress starts doing its job, which is extremely unlikely. At this point, the only way to avoid a yield-debt spiral (in which yields rise as debt rises, making service more and more unaffordable, eventually driving the country to insolvency) is massive austerity. This means tax increases across the board plus entitlement reform, which will deepen the current recession but prevent total fiscal and monetary collapse. Note that the current bill does the opposite. So, what will happen over the coming months and years? Yields will continue to climb, driving up borrowing costs and depressing economic activity. Note this is on top of the tariffs. Each 90 days, more debt will be issued at ever higher rates to pay for debt service, driving yields ever higher. At some point, the Treasury will start to print money (rather than enact austerity.) This will trigger both double-digit inflation and much higher yields--think 20%+. The Fed will no longer have any influence over rates. Existing debt holders will make out like bandits as the real value of their principal falls. However, the savings of pretty much every retiree and future retiree will be wiped out. We will enter a depression that only true leadership will get us out of. This is all a very real scenario, folks. Just because it hasn't happened here for eighty years doesn't mean it won't. There's nothing magical about the United States, certainly with our government no longer functioning in any real way.

You aren’t looking at history.

We are beefing up our “War Department “ budget.

Long before that calamity happens, we are conquering some countries and adding them to our balance sheet and incorporating their GDP into ours, meanwhile I believe we will wipe out their debt since the country that owes it no longer exists? Not sure about that last bit.

There hasn’t been a War Department in decades. Stupid boomer.

Not the PPP, but you’re a tool.

[Anonymous]

So what is the best way for the average person to make it through this?

[Anonymous]

Anonymous wrote:So what is the best way for the average person to make it through this?

Join the Administration so you can inside trade.

[Anonymous]

One big beautiful bill is to blame.

[Anonymous]

Anonymous wrote:So what is the best way for the average person to make it through this?

I have the same question and it seems no one knows. I also keep trying to find info on what it means for those of us holding treasury bills right now. I know it is bad for the gov bd side they are paying a high interest rate, but as an individual investor…they are paying a high interest rate. What is the real risk of default right now? I mean it’s aa1. Is that really a big risk?

[Anonymous]

The Golden Visa should wipe out the debt. And selling off all gov buildings or national park mineral rights.

[Anonymous]

Anonymous wrote:So what is the best way for the average person to make it through this?

+1