UST

Dry_Tomorrow3632

back then when it was hyped i also didnt think it was possible for UST to fall that hard lol (i just got into crypto around 2021 so little knowledge at that time), but was proven wrong when the depeg happened,

Puzzled-Service5889

A serious suggestion of a withholding tax on the interest paid to non-US UST holders is a signpost along the slow-at-first-then-all-of-a-sudden collapse journey

Canamerican726

Also - the plumbing of the global financial industry is heavily reliant on treasuries/dollar ('exorbitant privilege'). High inflation devaluing dollar, higher US gov't borrowing costs are problems, but there's a ton of inertia in USD for a lot of reasons outside of treasury yield. Even given a doomsday scenario for the dollar, it's not as simple as buying EUR instead of USD. No other country has the depth, breadth and complexity of US capital markets. It would probably take at least a decade of regulatory work, capital investment, internal process changes and major software overhauls in every financial institution for another country to offer an alternative. And (I work in the industry) - no one is seriously making a bid to displace USD/UST. As to which side of the scale weighs heavier - well, we'll see. But it's not just a question of relative yields.

AllCapNoBrake

Eventually it will have to fully unravel. The only fail safe is the UST printing the shit out of the USD to buy the JPY.

robotlasagna

Chinas (or any other countries) ownership of US Treasuries or lack thereof has nothing to do with the dollar being the reserve currency. Countries seek to own UST because they need to put their money somewhere where they can get a return that is very low risk. UST is that investment. When countries invest in UST they are giving the US those dollars in return for more dollars later. Countries using the dollar as a reserve currency means countries hold large amounts of USD in their central banks and use that liquidity to facilitate transactions. They do this for a number of reasons but typically because its way easier to transact in a currency that is stable. China decoupling from UST will cause pain for the US by raising yields but they are not showing any indication of not using USD in their central banks.

ndwillia

That’s what the average person sees it as, for sure (inflation hedge, yada yada yada). Metals are a hedge to USD, but what happens when the hedge is no longer needed by the central bank that levered up on the metals in the first place to protect their portfolios based in USD? They sell their US equities and/or UST and bring that money back to their domestic markets because they’ve extracted the maximum they can from US-based portfolios. USD going down due to foreign yields rising has no affect on the metals used as a hedge in the traditional sense. What’s going on right now with foreign vs. domestic markets hasn’t happened in years, so it’s really easy to assume that the use case for precious metals is still the same now as it had been up until recently.

ndwillia

That’s what the average person sees it as, for sure (inflation hedge, yada yada yada). Metals are a hedge to USD, but what happens when the hedge is no longer needed by the central bank that levered up on the metals in the first place to protect their portfolios based in USD? They sell their US equities and/or UST and bring that money back to their domestic markets because they’ve extracted the maximum they can from US-based portfolios. USD going down due to foreign yields rising has no affect on the metals used as a hedge in the traditional sense. What’s going on right now with foreign vs. domestic markets hasn’t happened in years, so it’s really easy to assume that the use case for precious metals is still the same now as it had been up until recently.

ecoburner87

USDJPY refuses to go down, UST's got the algo set to UP ONLY - what a shitshow [https://www.tradingview.com/chart/PdHKArhV/?symbol=OANDA%3AXAUUSD](https://www.tradingview.com/chart/PdHKArhV/?symbol=OANDA%3AXAUUSD)

ecoburner87

it's a bunch of converging things at once, like Davos/Venezuela/Greenland/Iran/Fed chair. just 1 of these events would create wacky dynamics in our markets for a couple weeks, but they're all happening the same damn month. and while that's all happening, China is unloading US Treasuries (weakens USD) as a troll move while UST tries to coordinate with Japan

ecoburner87

it's really complicated but here goes: less than a month ago, Japan announced a snap election (to take place this upcoming Sunday), for voters to approve 1) tax cuts and 2) money printing/big spending. bond traders saw this as an inflation signal (for the yen), real interest rates spiked up super quickly. our entire system of leverage is tied into Japan's 0/LOW interest rates ("yen carry trade"), many players were caught off-guard by the quickness of Japan rates going up, potentially ruining the whole mechanism American hedge funds use for leverage. this coincided with🥭causing a mess at Davos and Europeans starting to sell US Treasuries, which weakens the USD. Bessent said he was communicating with the Bank of Japan to coordinate a response. Bank of Japan needs ammo (money) to pay for these tax cuts and programs and also buy up their own bonds to stop real interest rates from spiking, which will definitely start next week after Sunday's election. their central bank has plenty of money to do so, it's in their large AI/tech positions in the S&P and US debt that they're selling back to us. they are THE single largest holder of US debt. meanwhile,🥭said very clearly that he wants the dollar to weaken, it's part of his policy. this last few days, the USD has strengthened extremely quickly since the dip a couple weeks back. i think UST is helping prop the USD value to give BoJ as many yen as possible to defend their currency. as you can see, that's causing chaos in American markets and metals. when this exchange is done, it's possible the USD nosedives again? who knows? this is unprecedented and involves trillions of dollars.

k3t4mine

If he gets his way with the balance sheet, that means a lot of UST supply will come into the market. That will drive yields up, effectively acting as a rate hike. The Fed can cut the overnight rate all they want, if the middle and long end of the curve are elevated, that means borrowing costs are elevated as well, and means a bigger discount rate needs to applied to future cash flows.

ForumFan32

I mean Gold run up was on fear of a crazy person being put in as Fed chair. Instead we got a former govener and the fear about holding UST stopped.

ThinkingOfTheOldDays

I was going to write yesterday that Buffett's major blemish the last couple decades was simply ignoring the USD, UST and gold's changing role internationally after Ukraine. Another L for me. 

Cyb3rBall00n

Would give two additional points of clarification regarding the interplay between asset classes: 1. Bonds / Dollars - Multiple drivers appear to be reducing UST holdings across the globe - CN & JP are the obvious ones, but we've also seen pensions reducing their UST holdings as well. Central Banks aren't going to wholesale liquidate their positions, but they might not roll the paper as it hits maturity. They take the principal in USD but then immediately trade out of it. This puts downward pressure on USD. Would also point out that foreign bond / currency holdings are a function of trade with that country. To the extent that the US is reducing international trade with foreign countries, the foreign demand for USD/UST also goes down. 2. Stocks / Dollars - While the generalization that individuals won't take an equity allocation and move it to a currency allocation makes sense, at the institutional (including SWFs) level, strategic re-allocations out of US Equities into other assets (non-USD denominated) will occur for both tactical and strategic reasons. Just as you point out, the return of the US equity market relative to AU or EUR has not been great and if the expectation is that the DXY will decline another 10% (made up a number) in the next 12 months, they might seek to control that exposure by either selling the stocks or hedging the USD risk. The other thesis is more broadly called "Sell the US". Why be long Equity/USD/UST when Trump is undermining the independence of the Fed, M2 continues to expand - [https://fred.stlouisfed.org/series/M2SL](https://fred.stlouisfed.org/series/M2SL) and there's social unrest? I don't see that this set of policies will attract capital support from overseas, even from our traditional allies. The volatility here is way too high to justify sitting in the assets.

type_error

I am curious why it isn't factored in here... Its big news in Japan but mostly radio silence here. Given that Japan has the fourth largest GDP and hold a ton of UST bonds.

pink_ego_box

You don't have any idea what you're talking about. Large central banks (China and India, EU is next) are dumping UST and buying gold, and Newmont is preparing a hostile OPA of Barrick that could result in a strong upside movement for $B. OP will at least walk away with 10, maybe 20M.

pink_ego_box

It could but China is selling UST and hoarding gold (much more than officially reported, looking at LBMA/Comex outflows) so I don't see gold dumping, and no analyst sees gold under $5000 this year.

Jeff__Skilling

> but what happens when business operations are hindered by an unreliable administration and new alliances are made in the global sphere? be comforted by the fact that a single presidential term is finite in nature whereas the assets-in-place in the domestic US economy will continue to operate as a going concern long after he's out of office. that plus the fact that OP already mentioned -- people tend to be overly dramatic and prone to panic selling. which is doubly true for any of the investing subreddits. don't believe me? Go look at various sovereign debt spread spot + future rates against an equivalent UST bill or note with a similar quantum and maturity and tell us what you've found...

pink_ego_box

The US has to refinance 26% of its debt this year. But its biggest creditors, China and the EU central banks, are reducing their UST holdings in favor of gold. According to Goldman Sachs, gold holdings represent 0.18% of portfolios in the US. Morgan Stanley recommends a minimum 20% gold attribution in your portfolio this year to hedge possible hyperinflation. The rotation from fiat to monetary metals is just starting.

ThinkingOfTheOldDays

Just talking his book. Long time gold bull. UST demand & holdings making new highs https://x.com/i/status/2014207180870996348

Hairy_Parsnip7682

Shanghai deliverable trading $13 premium to comex and LBMA. Chinese export restrictions. US tariffs on many countries. Imminent boots on the ground in Iran. Rampant money printing. Collapse of JPY carry trade with UST bills being dumped. You sir are truly regarded

MsMoreCowbell828

Canada is supposed to be petrified at the mere thought of losing daddy trump. Canada is supposed to shite in their drawers because they can't function without daddy trump, since he believes them to be a little tiny pretend baby country. If Canada is too afraid to lose the UST, (US of Trump) they'll come crying home and beg daddy Trump for forgiveness! See, geopolitics in a bag.

robotlasagna

I didn't miss that. I was waiting to see if anyone would point out what you did. All this talk of funds selling off UST is bluster unless we see weakness on the buy side of the open market. The Treasury auction is the only true test of what the worlds demand for us debt is. If bids are really low at the next treasury auction that's when you know the US is in trouble.

Money_Do_2

This. It was always fugazi, and now its come home to roost Doesnt mean theyre not right, it just means theyre finally coming around. It will shift markets. However, capital never cares about this stuff really and chases returns. If the UST yield high enough, or the market dips low enough to be underpriced, itll come back. Not the small moral stand people, but the super-rich who dont care about borders anyways.

Technical_Scallion_2

This is my view as well. There's a definite sense from US exceptionalists that other nations will never make the choice to shift away from the US because the market is too big, returns are too great, USD/UST are world reserve currencies/securities, etc. But that argument ignores that over time, all of these advantages are lessened by the US acting crazy, and so leaving before the music stops is the right strategic move for our former world trade partners.

SameCategory546

it’s not replacement of USD as reserve currency. Is the partial (PARTIAL!) replacement of UST as reserve assets

pink_ego_box

Nothing has changed fundamentally. Every dip will be bought. Central banks from the BRICS are buying heavily and dumping UST. Now European central banks will do the same since the US is clearly becoming a threat to the continent's stability and territory. Poland just annouced a plan to buy 150 tons.

MsMoreCowbell828

Do you think Haliburton, Raytheon & General Dynamics are the only suppliers on earth? Other countries build & will ship their wares as the UST (United States of Trump) is rendered a pariah state, every other tech capable country on earth will swoop in to fulfill that need and the billions of dollars that go with it. *You* simply don't understand that trump just spit in the faces of every world leader, that he & his administration think they are nothings, then he belched out ridiculous fake 'history' of WWII, lies upon lies mixed with incandescent insults. They will ALL turn from us, they do NOT need the USA, for anything. Enjoy the coming Depression, what an interesting strategy though! 🤙

robotlasagna

If you are so fundamentally sure that is going to be the case then why don’t you post your short positions on UST? I have high conviction on my thesis and will buy if Europe dumps. I also want to point out when they started with the tariff stuff in April and everyone here was dooming I posted my thesis which was that I was buying any good company with a depressed share price and got downvoted for that too. My retirement is moved up 5 years just based on that one move.

robotlasagna

I am more than a little concerned that people in an investing sub lack basic economic understanding so I am just going to post response direct from a professional economist on the effects of a UST sell off back when China was threatening to do this: TEXT BELOW: I'll give you a 5min answer as I'm in a meeting. Hopefully someone else can expand. The idea is called 'sterilization' and China is 'unsertilizing' or 'floating' these bonds. But first we need to hit another basic economic principle: the UST printing a bond has exactly the same impact as printing cash. Think about it this way, in a 0% interest rate environment, a $100 bill is identical to a UST zero-coupon bond with X maturity. With me so far? If we add in an interest rate, the UST issuing (say) a 1yr UST zero with $100 maturity and an implied rate of (say) 3% is identical to the UST printing a purely hypothetical '$97 bill' today. Still with me? Lastly, we also know that any complex UST bond can be synthetically replicated with structured zero coupon bonds (and if necessary synthetic rate/inflation swaps). In plain english, you can buy a whole series of UST zeros that exactly replicate a UST bond that (say) pays $X every 6mo for 10yrs and then $Y at maturity, and you can do this for every UST security. In its simplest form, this whole market is called the Treasury STRIPS market, and its the 'mechanical link' that ties together floating USTs and 'to be issued' USTs. Think of it as a 'check' that makes sure that there are no arbitrages. (Side note: exploiting these small pricing differences between existing USTs, their synthetic counterparts, and 'on the run' USTs was the strategy that Long Term Capital Management was using....for a while.) So: printing bonds is the exact same as printing cash. I don't have the time to fully explain this now, but the 'moment of inflation' (eg, the exact timing of when the inflation occurs from printing cash v bonds is identical too.) Theres a TON of myth around people saying 'we have to print a ton of cash to pay off the deficit which will trigger inflation.' This is wrong - if you print to pay off a bond, there is no inflation impact b/c you experienced the inflation the moment the bond entered the economy. I used to use Monopoly to teach this to junior bankers back in the day. Now sterilization: a $100 bill 'impacts' the US economy to the extent that it is IN in the economy and transferring value between parties. This should be fairly intuitive. If you went to the UST in Washington DC, got your hands on a brand new $100 bill, and then spent it - that $100bill will contribute to the economy and have a micro, micro impact on the broader US economy. HOWEVER, if you take that $100 bill, and buried it in your back yard, it will never contribute to the economy - it has been 'sterilized'. Because we know that UST=$100bill, you could also take an off the run UST and bury it, it will be 'sterilized.' Now to China. For the past ~20 years, China has been the biggest foreign buyer of USTs (and Japan and Germany/Europe). They do this b/c they are trying to keep their currency cheap compared to the USD, but CHina is (by far) the biggest buyer. In plain english, we have been flooding the world with USTs and as a result, the USD should be a lot weaker than it is now. But a weak dollar is very bad for countries that import into the US. So those countries exposed to a weak USD, have been buying and sterilizing USTs for 20 years. This is the root of the US's claims that China is a currency manipulator - China has been buying USTs by the trillions - and 'sterilizing' them - to keep their currency cheap relative to the USD. Same with the Yen and to a far lesser degree the euro. But we have good relations with Japan/Europe, so we don't call them currency manipulators. Now China is threatening to reverse that by floating a chunk of their USTs. The impact will be to weaken the USD relative to other currencies.....which honestly isn't that big of a deal in my opinion. Just say for sake of argument that the USD weakens by 20% over the next year: oil will be ~$10/bbl more expensive, US imports will be a little more expensive and exports will be a little more valuable - but the trade gap won't move a ton as a % of GDP. It does have the impact of exacerbating the tariffs, which is a net 'bad'. Additionally, we could see a trickle through of somewhat higher inflation in the US, but an additional 2% to 3% inflation would probably be a good thing as long as its spread widely across the whole economy (eg, not just concentrated in, say, energy and housing). In econ terms, its 'pro-cyclical velocity', whcih we need right now. But in total, I don't know too many people that are really freaked out about it on Wall St - its an interesting talking point, but not a 'holy shit' thing. People are bracing for it the same way you'd brace for a ~100bps Fed rate cut (eg, just be ready for a weaker dollar), but the Fed can basically just raise/hold rates if it becomes an issue. If China were to really float all of their USTs and the yuan, it would devastate their economy b/c they would effectively price themselves out of the global economy. This was longer than 5min..... ME AGAIN: Those bonds getting sold go to other bondholders who still need to hold them to maturity. The inflation happened when the bonds were issued. If other countries stop buying NEW treasury issues then we experience inflation but not by selling them off.

robotlasagna

I would be cool with this. If Europe dumps you can pick up UST10Y super cheap on the secondary market and then wait until rates come back down. Because it's 10Y you can make \~40% return. As long as we buy stuff from China and especially if we don't buy as much stuff from Europe that money flows into China and right back into Treasuries which will drop rates back down.

CSMasterClass

Dumping treasuries would do a lot of self-harm. A buyer's strike is more feasible, but even that is only feasible if there are not massive funds from exports that pile up in foreign accounts. The time to develop an altelrnative to the dollar/UST world trade structure is more than a decade, and three years will not make too much of a dent.

sovlex

I'm appreciate the gesture but Daily turnover in UST exceeds 1 trillion$.

robotlasagna

Someone has to buy them. If Europeans are stupid enough to dump UST the resulting liquidity crunch would cause rates to skyrocket. I would be all in on buying UST10Y at 7-8%.

robotlasagna

If Europe sold out of UST Where do they put that money? There is not anywhere near enough liquidity to move that to German bunds or Eurobonds. It’s an empty threat.

csab123

There are several factors involved. Global Central banks desire to move away from holding UST, this has been the case since interest rates spiked from near 0% to 5% UST's lost a great deal of value, an issue sovereigns don't want to deal with again. Second is the printing of money by the FED, with no backing, the federal reserve note loses value over time. This brings up the third reason, a potential backing of currency by gold and/or silver or other commodities. Investors see this and begin to flock to these assets. Can this cause the price to get ahead of itself? Yes, does this mean it's done going up? No. Lastly is the inflation factor, commodities can be a good hedge against inflation. Add these all together and you get a perfect environment for silver and gold to run. I think several of these factors are in the rear view mirror and investors will start taking profits hence my argument for BTC, the current environment is more favorable for BTC than SLV or GLD. Could I be wrong? Yes

SideQuestNYC

Significant rate drops could trigger mega corps and banks borrowing more, maybe for stock buybacks and other investments where the ROI is greater than the FFR. Stocks should go up. If the USD tanks, foreign countries that need us could buy up more treasuries, increasing inflation. But some of the larger holdouts like china and japan could sell UST like Russia in 2018 before they tank for pennies on the dollar. Like an unpaid bill, Inflation will be left as the next administration's problem, probably blame the libs. "I have a feeling in a few years people are going to be doing what they always do when the economy tanks. They will be blaming immigrants and poor people."

AfterDarkAsset

You're correct in that demand has gone up - for both short & long term UST's. That demand is, however, from private buyers. Particularly noteworthy is the shift in demand for long term. From institutional buyers (like Central banks) to private players. I think this actually supports the thesis that US Treasuries are now being seen less as stable assets that institutions like to hold long term and in turn provides further stability to these bonds. A virtuous cycle. Private buyers are more profit focused in the short term and they will play treasuries with that goal in mind. I think, more fundamentally, the issue here is that the underlying global financial order/system itself is under question now. In the short term, momentum makes it seem like everything is fine on the surface - but countries are already making plays to reduce reliance on US Treasuries. You're starting to see the cracks but hard to say how it will fail - catastrophically or gradually. Or when it will fail. My hope is that these cracks are surface level and can be mended, as can the trust in US financial institutions /policy and the stability of US political system itself. It's all very deeply intertwined ofcourse.

FuckingJPMAlgos

Can someone explain this "my representatives will buy mortgage bonds worth $200B" thing like I am a regard? Will the US treasury buy 30yr UST bonds? Why the fuck would this pump $OPEN?

Worth_Transition5188

UST backed by Venezuelan oil

pmotiveforce

Imagine shorting silver when it's got massive industrial demand, the dollar is being debased, and the world is telling the USD/UST to fuck off. Not saying we might not have more fake sell offs like yesterday, but it will be higher in 1 month than it is now by at least 10%.

yayahi

no. luna was algo linked to it's stable coin, UST, so when UST debugged the entire mechanism of the coin kept burning itself. zcash is not linked to any stable source: im regarded

SHIBashoobadoza

Everything is computer but electricity has been removed from CPI basket. US has $9T debt rollover to do next year at 3.8% so they need that number lower. Stable coins forced to hold UST as assets. The computers took er jerbs

MyPolaina4ever

It went from -100 to +50 like 3 times today (UST100). Free money, up and down.

PurpleReign123

This is what happens when a country implements YCC: easy to implement but difficult to exit without disastrous consequences. BOJ started YCC in 2016, to keep 10-yr JGBs at zero, or slightly negative yields … when inflation rears its ugly head, they had to widen the YCC band … The US (via Bessent) is also thinking of YCC as one of its options to lower UST yields. But given a larger fraction of USTs are held by foreigners (than JGBs), the after-math would be even more disastrous. That’s not a worry for Trump nor Bessent because they will not be at the helm anymore but the American public will be the ones left holding the bag.

Inittowinit1104

Where’s your income earning instruments ? One global event like a dirty bomb and you lose 50% of your net worth or more. Where’s your hedge ? Gold? UST? That account is fine as account B. Yeah you “trade”it , but you need an account A - which is at least 40% income and 99% protected. Too many bull years have really distorted people. Shit happens. It’s not if but when. Imagine you lose your job for a few years. That income earning account can carry you hopefully. Your trading with absolute BULL care scenario. Doesn’t work that way.

Walternotwalter

The carry trade doesn't just involve bond arbitrage. You borrow yen to buy assets. It's not just borrowing Yen to buy UST's. DXY just broke its 200 DMA. First time in a long while. Japan is trying to reshore capital. "Carry Trade" doesn't encompass the reality of why US stocks have been hitting a wall despite good earnings. Neither does rising Japanese rates. They contribute but there isn't a single reason. Rising rates generally strengthen a currency but the Yen is falling. Why? Because the US will have to intervene with swap lines based on non negative real rates due to how the JCB has monetized such a massive portion of Japanese government debt. Their bank reserve requirements have been lowered. The government wants big growth regardless of inflation. My answer stands true. Smart money is going to head to Japan rather than the overpriced AI circle jerk here in the US building data centers that can't be turned on unless power plants are built. But I am actually trading on Tokyo. I will not just buy the Japan ETF and have my gains destroyed by SoftBank.

mbacandidate1

You typed a lot of words to say that people have favored risk assets in the past few years and are now favoring lower risk assets (bonds, cash, value). You have brought no value to explaining why this is occurring, which is what truly matters to understand where we will go from here (risk on vs risk off). The reason is a global drain on liquidity (fed net reserves from tga build up, reverse repo draw down, and QT along with Japanese increasing yields turning off the yen carry trade) AND increasing risk to a continuing jobs / housing market deterioration (2yr UST tanked and probability of a Dec cut increased with the massive jobs data we received). Go back to conserving with your AI.

LionRivr

If you mean CPI or PCE inflation, sure. But we know those numbers don’t accurately reflect reality. And what actual retail investor is buying AAA bonds? Treasuries do not outpace currency debasement. The dollar loses purchasing power faster than the 4 or 5% you can get with any bank CD or UST.

Inittowinit1104

Pick 15 stocks. Make sure they are liquid in options , make sure you have some interest in them and make them your universe. Learn the feel , pe, where and how they trade vs index moves , how the react to earnings or tariff etc. blows my mind when I see my partner screening 250 names looking for something then goes nuts when something happens and doesn’t know what’s what. 15 names in enough to find an opportunity everyday in at least 2. All you need. You should spend 51% of your time focusing on index vs vix, index vs 10 year UST or gold or bitcoin. Stop chasing shit you have zero feel for. You will thank me later. Absolutes? Never. I’ll hop into hood puts or crwn after a good report but down 30-40%. I have cnbc and Bloomberg tv on all day to start up with all names.

robis87

since you bozos removing everything from Posts, here you go 3 pages here Thinking of starting to DCA in size into Dutch long end. I‘m European so no UST for me – currency + trump risk for foreigners. But in essence DM correlation along the curve is pretty close to 1:1, albeit structural differences, liquidity etc and barring systemic shocks. Netherlands seem to be better positioned to take on most of the structural longer-term headwinds countries like Germany or France are facing – debt and fiscal spiral, social and political turmoil, relatively safe from the geopolitical risks. Being a small country, they are 5th GDP in the EU, financial and tech center, -1% decificit, 45% debt to GDP. Below will provide my thesis with both arguments and possible counter-arguments/hesitations. **Main thesis** – we are in a clearly deflationary environment: economy slowing in Europe for a few years now, even longer in China and starting to slow rather rapidly in the US too. Unemployment, esp underemployment growing surely. Inflation seems to be sticky only in a limited areas of economy. Plus, the influx of cheap Chinese goods into the EU. ***Then again,*** Europe is much later in the cycle, and in theory inflation might bounce. But in reality it’s more likely the US slow-down will be sharper, faster and might even bottom out sooner than the European. **Also**, the elephant in the room – stock market bubble and the potential credit crunch from the shady private credit, equity, regionals and commercial real estate (again, mainly in the US). **Plus,** it’s hilarious to see European stock market valuations completely detached from the economic reality. They pumping simply and purely because the Nasdaq is pumping. ***Another counter-argument*** \- it‘s pretty clear trump starting to panick at every market downturn, even with stocks -2% from ath (Sunday’s stimy shitposting goes to prove that). Point being, that he’ll probably do a lot of stupid, reckless inflationary shit once the real crisis arrives trying to grow his way out of it. So this one is somewhat twofold – inflationary/credibility risk for the long end; **but** EU core/EUR could be viewed as a more stable alternative. ***The last headwind*** I see for my strategy is the Dutch pension system restructuring where their 36 large pension funds will decrease substantially their EU’s long end acquisitions over the next 2 y. Could translate in at least EUR 200B of lower demand. Might not seem a lot, but different European long ends not the most liquid assets on earth, so defo not a plus. Thoughts and your own strategies?   **TL;DR:** Thinking to go big into core EU/Dutch long term bonds because of the deflationary environment we in/entering.

Inittowinit1104

lol. You’re a bitter mouse Mr. I have absolutely ZERO problems w saying I’m wrong and giving kudos to the rights. In a nutshell. End year 680 after 650/685 ranges in spy. After first week of January at some point testing 640-645 the following months and by mid year back to 675-685. Clear enough? For qqq following same pattern with higher highs/lows. Bitcoin might break 112k by year end but we might see 89k through next mid year. Recoup won’t be above 100k but mid high 90’s. UST will range 4.18/3.74 closer to the latter by mid next year. Nvdia will re test 211$ and 184$ but probably right around 205$ by mid next year. Best performer RELATIVE to its own historic volatility and price action will be APPLE. A slow unsexy dud. Newsom/AOC ticker will emerge and Spain will win the World Cup. Anything else 🤓😶‍🌫️😜?

Inittowinit1104

I never sell calls. Although I have a CFa and a series 7 they tend to complicate my life. After years my list is now 15 stocks , 6 indexes and vix and UST. After years I know them all by heart tick for tick. I see a divergence and I hit it. Only way for me.

EnvironmentalPear695

At least instead of the UST being the igniter of money, everything can flow into the giant money furnace of AI.

BranchDiligent8874

Not if his short strategy backfires though. That said, Michael may have kept 100 million in UST bonds separately, he is doing most of the adventure using OPM.

Inittowinit1104

Aversion to following UST bonds, junk bonds and things like equal weighted indexes. If you’re a fast money dte guy and you don’t follow these your cooked.

Brawmethius

Bessents homies bought tons of Argentinia bonds dirt fucking cheap. Then they got dirt fucking cheaper, and suddenly the UST will do literally "anything" to save their currency (bonds).

cwep2

I’ve recently started to take profit on gold though after this massive bull run. I had 10% as of 2020, upped that to 15% in 2022 when US/EU started seizing Russian assets (thinking CBs would diversify UST > Gold) and then to 20% when it broke the long term resistance level around 2000-2100 in March 2024. Just reduced it down to 20% again which meant selling around a quarter of what I had.

InquisitorCOC

Yes, this is how you make the big money Right now the market is less than 2% from ATH, not that exciting The timing of this Chinese escalation is interesting though. Why didn't they stand tough back in April, when: - The US was fighting the entire world at once - Europeans were pissed at both trade war and Trump's stance Ukraine - USD, UST, U.S. Stocks were all in free fall - The Trump admin hadn't passed any meaningful legislation yet - Trump's policies were bogged down by local judges - DeepSeek driving deep doubts into the U.S. AI boom Now the situation is quite different: - DeepSeek R2, originally announced in late April, is being delayed again and again. [Difficulties reported in late June](https://www.reuters.com/world/china/deepseek-r2-launch-stalled-ceo-balks-progress-information-reports-2025-06-26/) still hasn't been resolved yet - US AI boom taking off to another level, along with massive new power generating capacities - Iran's air force annihilated by Israel, its nuclear facility destroyed by U.S., its 3000 ballistic missile stockpile exhausted after doing minimal damage - Arab countries and Turkey made peace with Israel, and stand firmly behind Trump - Trade deals with its Allies done - United front in Ukraine against Russia - OBBB passed and money for his agenda there - District courts and SCOTUS mostly ruling in his favor - USD is stabilized, UST is Trump's position is significantly stronger than 6 months ago

Terron1965

He is backstopping insurers the UST is just the safest way to store it when not deployed

Mr-Lungu

Yeah. But if you have assets - like stocks and real estate- you are smiling. A smaller percentage of your income goes to bread and milk and your asset growth is easily beating that. That is part of the reason why real estate has gone through the roof. Money printing goes to the top. And so does a devaluing USD. You are right - it sucks for borrowers and bond holders but the banks do alright with interest and bond holders are buying gold now. I think recently foreign governments held more gold than UST for the first time in decades. They learnt the lesson.

PaperHandsTheDip

Why do people keep making new stables? We have quite a few that actually work (USDC, DAI, etc) that are low risk of depegging. The algo stable coins scare me tho (DAI falls into that bucket). They're often easily manipulated (see: UST / LUNA)

MarketCrunchAI

whats interesting is for all the dollar debasement conversation, the far end of yield curve hasn’t moved much (people still trust UST!) and gold breaking ATH.

jamez_eh

I'd argue the reason gold is at an all time high is because central banks have reduced UST allocation and are instead buying gold. Gold has real returns in other currencies as well, but it is because nobody wants to hold dollars and it is the best alternative to treasuries.

EquivalentPop7894

10 year UST crossing above 5% would be my guess.

TinyBreeze987

Yeah I’ll take my chances on the UST defaulting fully

HartbrakeFL21

2nd market open day in a row that CNBC refuses to show 10Y UST yields on their website.

kx____

Do you know where the biggest supply of money is currently coming from? The interest on US debt. It’s well over a trillion dollars per year. That money is being created by the UST in the form of Ts but ultimately translates to more money in the system.

Zealousideal_Ad5358

Intresting. There was some ROC, but overall the NAV went down about 40% between 1984 and 87, while the UST 10 yr yield declined from almoat 14% to around 7%. That still doesn't explain why the dididend income wasn't reported. I'm also still looking for how she disposed of the shares, whether it was a sale or finally all the capital was disributed. There were all kinds of funky tax loopholes back then. Who remembers "income averaging?"

Available_Common_126

If the market senses more risk in US treasury bonds for whatever reason (and rates go up), all other US rates will follow suit. If a government is more risky to do business in, all borrowing rates within that country will adjust for that additional risk. That’s why government debt (UST) are used as benchmark rates

Jeff__Skilling

> When the govt can't pay the military a decent wage, it will collapse. Which is extremely unlikely. If you don't believe me, just go look at UST yield spreads

SpectatorRacing

Treasury demand is not down, the narrative is false. Last week we had a blow out treasury auction. China is down, but China has been steadily reducing UST purchases for a decade and it has continued at the same cadence the last few years. No spikes.

AttractiveCorpse

UST

ButtStuffingt0n

Just wait until CPI and PPI come out next week. If the bond market thinks the Fed is cutting into an inflation spike, it's going to compensate with yield increases on the 10 and 30 year. Meanwhile, China, India and (shortly) Europe are going to continue pulling back on UST purchases to hold more gold. That will also put upward pressure on yields.

ImakeBADinvestmentsx

UST IN: 🇺🇸🇮🇳 President Trump is reportedly considering blocking US tech companies from outsourcing jobs to

Fox_n_Roll

a digital currency pegged to the value of the USD. Only makes sense if You have enough funds to back it. Looking at You UST...

Sad_Chest1484

SOMA portfolio is massive (trillions). Any treasuries that roll off is money back into the financial system. If UST roll off exceeds $5bln a month which is the case they need to buy more treasuries to maintain the SOMA portfolio which is exactly what is going on. MBS portfolio will never wind down. That’s different and they want to avoid disruptions in the mortgage market. Now sir you can tell me I’m rightt or you are a true dumbass. This is LITERALLY my job in the financial industry

Sad_Chest1484

SOMA portfolio is massive (trillions). Any treasuries that roll off is money back into the financial system. If UST roll off exceeds $5bln a month which is the case they need to buy more treasuries to maintain the SOMA portfolio which is exactly what is going on. MBS portfolio will never wind down. That’s different and they want to avoid disruptions in the mortgage market. Now sir you can tell me I’m rich or you are a true dumbass. This is LITERALLY my job in the financial industry

DetroitPizzaWhore

Your Unity about to moon for a whole another reason.... https://youtu.be/6XGeJwsUP9c?si=UST3DZmvliW8TxvU the most anticipated game for 3+ years

PaperHandsTheDip

EOD lots of the big prop firms are manipulating markets. I see it all the time in crypto. It's just a question of how much, how much do they get away with & whats the punishment for being caught? For example - if you remember LUNA / UST? Turns out Jump Capital was manipulating it / artificially maintaining the PEG to attract investors into LUNA. It was a complete ponzi. Once it got big enough they pulled out and profited ~1.28b billion. The punishment? A mere ~$130m fine. They literally knew it was a ponzi, sustained it to attract naive investors / retail and pulled the rug on them. If you lost money on LUNA <- the culprit was jump. https://www.coindesk.com/business/2023/02/17/jump-crypto-is-unnamed-firm-that-made-128b-from-do-kwons-doomed-terra-ecosystem-sources All the big firms do similar shit. They usually just get away with it...

Successful-Tea-5733

There is a common misnomer that consumers are paying all the tarriffs, that's simply not true. I've said this many times, I am a US widget importer, I buy Widgets from South Korea at $5 a widget. Lets use a 20% tariff, so now for that same widget my net cost is $6, the $5 cost plus the $1 tariff my company pays to the UST. Well, I tell the company in Korea I'm going to start looking elsewhere for cheaper widgets. The Korean company say, well, lets instead sell the widget to you for $4.20 and then the net cost of the tariff is only 4 cents. Tell me again who is really paying the tariff? If you guys think I'm wrong, why do you think other countries are complaining about the tariffs? Seriously, explain that to me. When we put a tariff on China, they retaliated. Why? If it's just a tax on US consumers why would China care what tariffs we charge? They care because they know who ultimately pays the tariff.

CallLivesMatter

>Best Case: >TLT gains 50% to 100% from rate cuts on 66% of my portfolio If you had timed it perfectly in late 2018, when it seemed rates were going to rise, and then gotten your exit in July 2020 you’d have made ~50%. So basically you need to time your trade on two major events. “Best case” is probably too optimistic here. >Base Case: >AMD calls go to $0 if NVDA outcompetes AMD like in past AI failures such as MI300 >TLT rises as rates come down, which recovers the call premiums and results in break even in about 2.5 years Yeah, this is very close to the same as the best case in terms of what you need from TLT. You still need a ~47% increase in order to break even. >Worst Case: >AMD calls go to $0 >TLT drops because inflation spikes, resulting in a 30% loss there as well. This is unlikely in my opinion but possible. What sort of things could spike inflation again? Things like, I don’t know, another round of massive deficit spending? Or maybe inflation will rise if we deport a ton of the low cost labor that has been brought in to artificially cap wages across a wide band of industries. Or maybe the government imposes some huge new tax on the importation of goods from a handful of the largest suppliers of said goods. But those things wouldn’t happen, right? At least not all at once. This one should have been your base case. Inflation is already embedded across most consumer goods and it’s not coming down. The best weapon against inflation is a drop in energy prices since they are the major input cost for basically every non-service business on the planet. WTI is already pretty cheap here. HH nat gas is $2.96. When I left that business *11 years ago* it was…about $2.85. It’s not getting much cheaper from here. There is no obvious naturally deflationary forces that will arrest what was started in 2020. Betting against persistent inflation while simultaneously believing that the UST will become **more** attractive after racking another few trillion dollars into the deficit is, uh, bold. An actual hedge would have been calls on NVDA plus a basket of all the smaller competitors to AMD. That way if your theory of their growth trajectory is wrong you will capture some of the upside from anyone else who gets their market share (which let’s be honest, that means NVDA right now). However if your theory is correct then you still might not get completely wrecked on that basket since you could get a rising tide effect that pushes the whole space up before investors start to separate out the winners from the losers.

cutiesarustimes2

UST 30yr Auction Results: 4.813% 2.1 bps tail BtC 2.27 Indirects 59.5% 🤮

I_Own_A_Fedora_AMA

The market will probably continue the AI AI AI rally until one of these bearish catalysts manifests: 1. Oil spike on Russia secondary sanctions 1.1 Oil spike on Iran war 2. Long term bond yields spike because the Fed cuts and we get inflation fears 2.1 bond yields spike because there's Fed hikes in response to cooked data showing no inflation and infinite jobs 3. Bond yields spike because there's not enough liquidity/demand to absorb the new issues coming from record budget deficits, plus treasury has to make up for lost time when we hit the debt ceiling 4. Bond yields spike because the trade deals are real and foreigners sell UST to build factories in America. Sounds unrealistic at first, but from a foreign banks perspective UST is dollar denominated debt, and can be sold to originate higher yielding dollar denominated construction loans. 5. META, AMZN, GOOGL, TSLA/XAI, the Saudis, or open AI announces cuts to planned NVDA purchases because they have better custom silicon 5.1 somebody cuts chip purchases because they give up on the AI race ala AAPL 5.2 somebody cuts chip purchases because investors don't see a realistic path to profitability ala META with the metaverse spending 6. Courts say tariffs are very cool and very legal (we have a decision from the appeals court coming this week, but if it doesn't legalize tariffs they will appeal and drag this out further) 7. China takes Taiwan and we blow up the chip fabs so they can't have them (SPY -70% in a week) So like odds are at least one of those will happen and my puts will be fine

lonely_biscuit

It’s unclear whether it’s a case of too high short term interest rates currently (mortgage rates are linked to the 30Y UST while the Fed only directly controls the short end of the yield curve) or if it was the long periods of QE which resulted in too low long term interest rates which then inflated house prices to a level that is unaffordable currently. Absent a massive shock like the GFC, house prices very rarely decline significantly (both a policy choice but also a structural aspect of the market being a home/shelter but also a quasi-investment asset). As such you could argue that rates are too high but also convincingly argue that house prices are too high - both driven by monetary and fiscal policy.

Fluid_Valuable_7867

Lost substantially in Celsius bankruptcy n Luna UST crash. Now back to break even mainly via gains from investing in cheap HK mkt.

Fuzzy974

So, citizens of the UST (United States of Trump), did you all receive your laters about those tariffs that you're going to have to pay?

Jeff__Skilling

> Who will buy this 37 trillion debt ? The entire market....? Don't believe me? Then go take a look at bond spreads between nation-states and tell me how the 10Y UST yield stacks up....

m0nsieurp

In 2022, the fiscal situation of the USG was different. I'm extremely worried about the recent USD sell off in the current context: ATH gold, ATH SP500, rising UST yields, out of control US budget deficit. One trillion USD a year of interest is NOT a sustainable trend.

Sean_VasDeferens

3 month UST's

banditcleaner2

Well, zimbabwean currency hyperinflates so fast that yes, he might be ok with holding his money in stablecoins because even the risk of the stablecoin going tits up is better to take on then guaranteeing his money loses half its value in one year. According to google, zimbabwean currency inflated at 92% in 2025. Lets pretend like Us-terra stablecoin collapses in the next month rather then how it did years ago. So if someone in zimbabwe bought USDT, UST, USDC, and another stablecoin, and he lost all of his money in UST from that coin depegging, he still comes out with 75% of his money, which is a lot better then holding his native currency and getting hyperinflated to shit.

ensui67

The dollar trades in a range and was extraordinarily high since the pandemic because of the strength of our economy and the Fed having to keep rates higher for longer, relative to the rest of the world. We are merely mean reverting right now. You need to look at a 30-50 year dollar chart for context. Government is still incredibly reliable to a fault. The Fed is hell bent on bringing down inflation at the cost of growth. They are likely overdoing it right now and I guess you can say in the eyes of treasury investors, we’re about as good as it gets. Follow the money. The money still goes into UST. Even stable coins are UST. Everyone in the world wants to transact in USD and by extension, UST. Corporate earnings are very good and capex spend on Ai is still just incredible. Major companies are simply incredibly profitable and now spending massive amounts on R&D. In the long run, stocks are priced based off earnings and flows. If this continues, it would not be surprising to see a third year of nice gains in the stock market. Every market needs its doubters for it to go higher. The outsized gains have to come from an inequality. Historically stocks just go up and to the right. Staying profitable means staying in the market. Doubts come and go, profits stay, for those willing to just sift through the noise for the signal. Many missed the boat in April. Are they about to miss the boat again? Stay tuned.

duqduqgo

I'll assume you mean the US treasury market, because there are many bond markets sovereign and corporate. bond market isn't signaling much of anything in my view. It's reflecting the changing values of global trade and adjusting for future spending all over the globe and US stability and interest rate change probability. The UST market has been in a range for a while now and the curve has been pretty stable. Once again an understanding of what drives currency values is critical. The greenback has been a reserve currency because when the US buys stuff from other countries we pay them in dollars. Those countries then have a lot of dollars because we buy a lot of stuff. They often keep the dollars because they have proven stable stores of value over time, and they buy treasures with those dollars as a HYSA, and the UST market is multiples of the size of any other sovereign debt market. All global debt and currencies are graded on a curve. Unless and until and to the degree that other countries buy more, are a better store of value, are more stable and pay better interest, the greenback will remain a reserve currency. The US is not going to default. If the US did default, it would be technical and very short term and not actual. The UST can print all the money it wants to service it's nominal debt and avoid actual default.

qw1ns

>PE ratio is insane I do not understand where OP sees insane P/E? * CRCL has 61.93 Bln in reserves in short term US Treasury. * Let us say 90% is held in US3M which gives 4.3% interest. * The make $2.396 Bln as income from UST ={ 61.93 \* (90/100) \* (4.3/100) } * Assuming 20% of income goes to all expenses/overhead (like banking industry), they earn $1.917 Bln * Current Market Cap is 40.15 Bln, then P/E = ( 40.15 / 1.917 ) = 20.94. If the circulation increases over an year (say from 62 Bln to 100 Bln), the P/E comes down

ThisKarmaLimitSucks

Mango will postpone everything and fold like a cheap suit, because he realized that foreign powers can just sell their UST holdings and blow him up if he really pisses them off.

Sean_VasDeferens

I keep my cash in three tranches of 90day USTs, so I have a tranche expiring every 30 days. The effective tax rate is a little bit higher than the actual rate since there isn't any state income tax on UST, which can be attractive if you live in a state with high income taxes. Also note that when rolling a tranche at IBKR you can do it the day before expiration and IBKR won't charge you any interest on what is essentially and intraday loan so you never miss a day's worth of interest. I'm 90% cash and make my living trading indexes, I hate stocks.

robotlasagna

One thing to remember is that long dated treasury yields do not consistently track the short end of the curve (which the FED controls). If you ever looked at the overnight rate vs UST30Y you would see that even when the fed lowered rates the 30Y didn't track down with it. And that makes sense; Long dated bond holders primarily want stability not yield. The FED can also buy long dated treasuries using open market operations but they they cant buy that much without printing money. If that happens we go back to high inflation.

555-Rally

This is what it is....DXY drop, US10T(+) yields. It's not the M2 that is rising really. It is, but not appreciably like 2020/2021 (https://fred.stlouisfed.org/series/M2SL show 1Y vs 5Y). MMF however are growing...that's US DXY moving out of UST's and into cash and/or stock gains. There's a lot of cash on the sidelines ready to buy dips speculatively.

Possible-Rush3767

You're arguing for tax cuts for the rich versus funding of infrastructure and domestic manufacturing, all while this admin destroys social safety nets which will lead to more unhoused and a spike in violent crimes, which will require further defense spending. How stupid can you be? Did you check the UST bond auction today? We can't even get other countries to invest here anymore because of the instability inserted by this admin.

ObfuscatedSource

UST with no leverage is generally speaking used a highly liquid inflation hedge. With leverage is of course a totally different story, and applies mostly to longer bonds, such as the 30 year treasury bonds.