Today, our “new macro, new rules” theme is being proven. The macro changed in 2022, when the Treasury bond market rebelled and destroyed the secular downtrend in long-term yields.
However, there is another equally horrendous number that was one of those same kinds of anomalies that started back in the Biden Administration, and the present government has decided not to ever correct that one, too. In fact, the present government has decided to double down on the error.
And speaking of scoring, let’s next pull up Gold’s weekly bars and parabolic trends from one year ago-to-date. Last week’s gain of +8.3% ranks fourth best century-to-date, (the best weekly gain being +13.1% for that ending 19 September 2008 when the Black Swan’s wings fanned the flames of the FinCrisis).
The new policy will allow the central bank to hold up to 700 tonnes of gold even if the value exceeds 30 percent of reserves.
The US, as issuer of the global reserve currency, benefits from world trade by being able to borrow at low rates. The countries whose exports we buy use the dollars we pay to purchase US assets, including our Treasury debt. Dalio says we should not assume this will continue.
