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Scott Bessent checking bond yields after repurchasing $6 billion of Treasuries

68,957 次观看 • 13 天前 •via X (Twitter)

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🚨 JAPAN YEN CRISIS IS STARTING TO HIT THE U.S. BOND MARKET The Reverse Carry Trade is closing in, and the next pressure point is bonds and housing. Japan has already carried out another massive yen defense. Instead of dumping its huge pile of U.S. Treasuries, officials are using dollar-selling intervention and other liquidity tools to support the yen. Scott Bessent has also pushed for a larger FIMA repo facility, allowing Japan to raise dollar liquidity against its Treasuries instead of selling them directly. The reason is simple: WASHINGTON DOESN'T WANT JAPAN DUMPING TREASURIES INTO AN ALREADY FRAGILE BOND MARKET. But this is only can-kicking. Japan's August reserves fell sharply, while foreign securities holdings dropped by roughly $88 billion. That workaround is shrinking. When it runs out, forced Treasury sales become the remaining option. And once that happens, the impact spreads fast. Treasury yields rise. Mortgage rates follow. Housing comes under more pressure. Liquidity weakens. Carry trades unwind. Risk assets get margin-called. THAT'S WHY THIS IS MUCH BIGGER THAN JUST THE YEN. Japan is the largest foreign holder of U.S. Treasuries. That is exactly why Washington joined the yen rescue. Not charity. To delay a fire sale of Treasuries into an already stressed U.S. bond market. The U.S. bond market is already under enough pressure that Scott Bessent announced larger Treasury buybacks and even discussed using the Treasury General Account to fund them. If Japan's selling wave arrives, mortgage rates follow Treasury yields. Housing gets hit harder. Liquidity thins across the world's benchmark bond market. The Reverse Carry Trade accelerates. And a U.S. funding shock can quickly spread into a global slowdown. THE INTERVENTION CAN DELAY THE PROBLEM - BUT IT CANNOT SOLVE IT. This is exactly what BoJ's Yuto 🇯🇵 warned about after Washington's intervention: "The suffering that will result from this will be amplified tenfold." WE'RE ABOUT TO WATCH THAT HAPPEN IN REAL TIME!👀

DANNY

40,004 次观看 • 1 个月前

🚨 SCOTT BESSENT EFFECTIVELY CONFIRMS A BOND CRISIS, SAYS MARKET TOO ILLIQUID TO CONTROL Treasury Secretary Scott Bessent went on CNBC and said the quiet part out loud: He raised the size of U.S. Treasury buybacks because “we are in a very illiquid period. The market is moving quickly… I can’t set the equilibrium price.” This is the same man who weeks earlier told traders “I am the house now. I have asymmetric information. Bet against me if you want.” Here’s what’s actually happening. He doubled bond buybacks, then pushed toward $6 billion, liquidity-support buybacks of 10- to 30-year bonds. He went on to dump Euros and Dollars to save the yen so BoJ doesn’t dump their U.S. Treasury Holdings. Scott Bessent even warned the Fed to expand the FIMA facility to Japan or watch the treasury market bleed. The 10-year has been grinding toward 5.2%+. The 30-year just printed levels last seen in 2004. Global government bond yields are near 4%, highest since 2007. Japan’s 10-year hit highs not seen since 1996. Germany’s 10-year is at 17-year peaks. This isn’t one country. This is a synchronized long-end revolt. Japan still holds about $1.1 trillion of U.S. Treasuries, the largest foreign holder. Those holdings have been sliding for months as Tokyo’s own debt-to-GDP sits above 220% and JGB yields explode. When the world’s biggest overseas buyer starts preferring its own higher-yielding paper (or just needs the cash), the bid for U.S. duration gets thinner. That’s the illiquidity Bessent is now admitting he cannot paper over with a few billion in buybacks against hundreds of billions in new issuance and $40 trillion+ of existing debt. When the official who called himself “the house” starts saying he cannot set the equilibrium price, the market is telling you something simple: we are in a bond crisis. The most dangerous response from Yuto 🇯🇵: “Japan isn’t just betting against the house, it’s bringing the entire house down.” We’re now seeing that as a global debt crisis which could catastrophically turn into a global liquidity crisis if not stopped. That’s why gold exists. Not as a trade. As the asset that doesn’t require a Treasury Secretary to promise he can still control the price.

Stern Drew

767,085 次观看 • 7 天前