Everyone’s telling the story about markets screaming higher.New all-time highs for the S&P…New all-time highs for Bitcoin…And surprisingly, even the dollar is rocketing up.But few people see the Crown of Debt about to be placed on Trump’s golden head.Except for the bond traders, that is.Bonds are telling a different story…A major bond sell-off sent yields up, and up this week.Bond yields went from 4.2% all the way to 4.48%.(Click on image to enlarge)
They say bond traders are sending Trump an important message. writes:
US Bond Yield Spike Sends Warning to ‘King of Debt’ Trump
“As traders sent assets from stocks to the dollar rocketing on optimism that a second Trump administration would be good for business and stoke an already strong economy, investors in the $28 trillion market for US government debt drove yields to the highest in months.
The selloff is a reminder from a powerful constituency: The so-called bond vigilantes are monitoring the self-described “King of Debt” as he claims an “unprecedented” mandate to carry out an agenda of tax cuts and tariffs…
…The 10-year Treasury yield, the risk-free benchmark that anchors more than $50 trillion in global dollar-denominated fixed-income securities, soared by almost a quarter point Wednesday to reach 4.48% at one point, the highest since July.”
While the market is sending “it can only go higher” signals, bond traders are sending another message.Because the Congressional Budget Office took a look at Trump’s platform and decided it wasn’t good news.They surmised Trump’s platform would drive national federal debt up another $7.75 Trillion by 2035.It may not play out that way, but reports like that have a way of influencing those with fiduciary obligations – mainly institutional investors managing millions and billions of US dollars, and…Treasury debt(bonds), which have shot up about $10 Trillion since 2020 – incredible…(Click on image to enlarge)
…With another $22 Trillion totalling $50 Trillion in dollar-denominated, worldwide.So you know, that means there’s A LOT of debt hovering around out there.When yields increase, it’s not exactly a good thing.It means more US dollars will need to be printed to pay debtors around the world.You can see, that just a 1% difference on $28 Trillion, or $50 Trillion… Is a lot of money.$280 Billion…Now, some are saying yields could go up to 5%, or more…Trump may have won the Presidency.He may have won the crown, but he’s also getting everything that comes with it.Debt.With that in mind, what does this mean for gold?The correlation between gold and US debt is strikingly close.
When debt increases, gold likely follows suite.Even though we see a sell off in gold prices at the moment, this is the best time to move into gold.More By This Author:3 Sunday Morning Thoughts – Oct 13How You Know: How Much Gold is Worth After the Collapse…Mind the Gold Gap: 3 Charts Show Central Bank’s Move From Treasuries to Gold, And One Easy Opportunity for Retail Investors
