Gold is not just a hedge against risk in the midst of an economic crisis – it is becoming a core asset class in the modern investment playbook – The Triffin Dilemma and the Weakening Dollar. In more detail: The past six months have been marked by unprecedented turmoil for the global economy and financial …
Tag: public debt
Bond Markets: Reduce Debt and Deficits – deficits will not be financed by the markets
The Land of the Rising Sun is not generally of much interest to global investors — until something goes really wrong, when it does. Japan’s $7.8 trillion government bond market is suddenly causing major financial shocks around the world. A few days ago, Japanese government bonds (JGBs) were the usual haven of calm with ultra-low …
Nine indicators that indicate a high probability of an economic crisis in the United States
The financialization of the economy in the last quarter of the 20th century created a global “bubble” that is now bursting, starting with the United States. The 2008/2009 financial crisis in the United States and then the debt crisis in the Eurozone, with Greece as the main protagonist, were apparently only the first episodes of …
How will the “punishers” of the bond market be eliminated in 3 moves? The battle for the 10-year
Donald Trump’s retreat, as many mainstream media outlets have pointed out, was not so much driven by the bloodshed on Wall Street as by the reaction of the so-called “punishers” of the bond market (please read also the analysis titled “Tariffs and the $3 trillion held by Asian central banks that make them punishers in …
Debt restructuring using tariffs is a risk for the dollar
The successful Plaza Accord of the 1985s is now apparently serving as inspiration for the administration of US President Donald Trump, as it seeks ways to weaken the dollar with the ultimate goal of improving America’s trade balance. While at the same time not wanting to weaken the dollar’s power as a reserve currency. Donald …
US debt is unsustainable – at 200% if tax cuts become permanent
The US debt is the enduring nightmare of Donald Trump’s economic policy… His presidency, after all, will be judged by whether he deals with it in a credible way. The independent Congressional Budget Office (CBO) has estimated the impact of making the tax cuts permanent. It found that US government-issued debt could soar above 200% …
The US is “controlling” debt with inflation
There is an old joke among investors that, in our time, is tragically accurate. Countries start by borrowing from each other. When that trust is gone, they borrow from the banks. And when that source is exhausted, they end up stealing from the people. This theft can appear in various forms: from taxes and special …
Trump administration cuts borrowing costs in two ways: Musk’s DOGE in spending and cheaper energy
By sidelining the Federal Reserve in order to lower borrowing costs for Americans, the Donald Trump administration says it will reduce government spending and increase energy supplies. The payoff will be twofold: it will ease inflationary pressures and strengthen the economy’s fiscal position. While President Trump continues to urge the Fed to lower short-term interest …
Banks’ exposure to government debt will bring economic collapse
Crises are never caused by excessive exposure of businesses and individuals to risky assets. Crises can only happen when investors, governments and households accumulate risk in assets where most people believe there is little to no risk – namely government bonds. The recent sell-off and the underlying trend What does the recent sell-off in US …
The huge Public debt and Budget deficit, the trade war and the… problem with the dollar
Investors around the world spent much of 2024 worrying about China’s problems with the housing market and deflation. In 2025, it’s the US’s turn to be the star of the negative scenarios. While Donald Trump’s trade war is making headlines, the rapid decoupling between US net foreign investment and the level of federal debt is …