5 ms·

Treasury Yields Soar as Ballooning U.S. Deficit Worries Wall Street

62 points by inverted_flag 1y ago

doubtit 1y ago
[flagged]
- 13_9_7_7_5_18 1y ago
  [dead]
mindslight 1y ago
Does anyone else have the sickening feeling that their actual plan is to straight up destroy USD, with the looters fleeing to hard assets and foreign/crypto currency, and the plebs' currency crisis then serving as the justification for naked fascism red in tooth and claw? With the narrative then shifting to the usual "Democrats did this! And we tried to stop it but we were too late!" nonsense, backed up by an army of "AI" spambots. The tariff tantrum, destroying US soft power institutions with DOGE, alienating all of our allies with petty feuds, the constant framing of the United States' enviable global positions as bad things. None of these things make any sense if you actually want the United States to succeed.
- nemothekid 1y ago
  >Does anyone else have the sickening feeling that their actual plan is to straight up destroy USD Stephen Miran, the chair of the Council of Economic Advisers under Trump, is pretty much trying to do this. He published 'A User's Guide to Restructuring the Global Trading System', and it pretty much outlines why they should destroy the USD - in order to bring manufacturing home, so that the warhawks will no longer have any reason to not start a war with China
  - suraci 1y ago
    I like Stephen Miran, I always like people who are (relatively) honest > CEA Chairman Steve Miran Hudson Institute Event Remarks https://www.whitehouse.gov/briefings-statements/2025/04/cea-chairman-steve-miran-hudson-institute-event-remarks/ https://www.whitehouse.gov/briefings-statements/2025/04/cea-...
    - mindslight 1y ago
      It's a bit of a stretch to call this juxtaposition of topics, with absolutely zero analysis of how they're connected, honest: > we tax hardworking Americans mightily to finance global security. On the financial side, the reserve function of the dollar has caused persistent currency distortions and contributed, along with other countries’ unfair barriers to trade, to unsustainable trade deficits. Money is fungible between these two concerns. The excess demand for USD is a source of revenue for our economic empire, realized by the continual monetary inflation without nearly as much corresponding price inflation. Some of that monetary inflation has been used by the government (~"deficit spending"), but the sheer majority has been getting dumped into the financial industry to bid up existing assets as a handout to the rich. That is what has left the American worker high and dry - near complete inability for the US government to use that already-centralized revenue to help wider society, due to a political movement based around fake austerity. The article continues on using the passive voice to describe multiple things that the US government could have put a stop to any time it wanted, framed as if they were being done to us by other countries. For example: > in the years running up to the 2008 crash, China along with many foreign financial institutions, increased their holdings of U.S. mortgage debt, which helped fuel the housing bubble, forcing hundreds of billions of dollars of credit into the housing sector without regard as to whether the investments made sense Obviously if the government had set interest rates higher rather than lower, there would have been fewer mortgage bonds to buy and the dollars would have had to go elsewhere. I don't know if this pattern is deliberate or just an inevitable result of the bizzarro framing where having the world reserve currency is asserted to be a liability, but either way it is most certainly not honest.
      - suraci 1y ago
        (relatively) I call this kind of nonsense that can be seen through at a glance an 'relatively honest lie' those lines you quoted are nonsense that can be totally ignored without misunderstanding his point, those lines are like something as "get schwifty" > Second, they can get schwifty by opening their markets and buying more from America > Fifth, they could simply write checks to Treasury that help us get schwifty
- ty6853 1y ago
  Anyone with 0.1% of a brain switched to hard assets during the COVID ~0% money printing mania.
  - hshdhdhj4444 1y ago
    And they would have lost a record increase in U.S. assets across the board, including the US dollar, which should have gone down if the problem was money printing. It’s rare to have such a clearly evident case of cause and effect. We know why yields are going up. Because investors don’t believe the U.S. government can control their budget deficits. The recent rising yields have little to do with money printing from 4-5 years ago.
    - hedora 1y ago
      Also, 0% interest was a thing for years before covid. It was pretty much the entire trump administration. (Back then, we bet on unprecedented inflation, and that’s been working out great so far.)
      - ty6853 1y ago
        Yes you're right. I was just too poor then to notice.
    - ty6853 1y ago
      When the US government can't control their budget deficits, one of the way they dissolve those liabilities is through inflationary activities.
- jameslk 1y ago
  This present issue has been caused by decades of bad fiscal policy by both parties: https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S Here for example, the Congressional Budget Office, forecasted federal debt as a percent of GDP would continue to rise unchecked, back in 2023: https://www.cbo.gov/publication/59014 https://www.cbo.gov/publication/59014 The only presidential politician who sounded the alarm was Ross Perot, all the way back in the 90s. Lyn Alden has been talking about this for a long time. If you want a good intro to the problem, I’d recommend this article of hers: https://www.lynalden.com/september-2024-newsletter/ https://www.lynalden.com/september-2024-newsletter/
  - mindslight 1y ago
    > This present issue has been caused by decades of bad fiscal policy by both parties So I completely agree with this statement, but I completely disagree with the metric you've chosen to illustrate it. "National debt" only exists due to the martingale of the Federal Reserve neutering the government's own monetary sovereignty. If we need to have an inflationary currency, then the new money should be spent by Congress on deliberate public goals - it's another tax. You can tell "national debt" is a dodgy metric because it combines two very different things into one scary-in-the-context-of-household-finances thing. The portion of "the debt" that is Treasuries held by the Federal Reserve is the lesser bit of monetary creation that was actually spent for public goals, in spite of the fake "fiscal responsibility" narrative. It is moot as far as debt goes - nothing actually happens if it compounds to infinity. The other portion of "the debt" that is held by private/foreign owners is the government functioning as a bank account of last resort, and could very well just be at the central bank instead. What we currently have is a dog and pony show to pretend that we don't have this centralized fountain of money, in order for the financial industry to keep getting the first cut of low interest loans (which have mostly gone into bidding up the asset bubbles).
    - jameslk 1y ago
      This is basically a modern money theory view (correct me if I’m wrong)? It relies on discipline in the government to prevent inflation, e.g. raising taxes and cutting spending. But this is a similar problem to what we have already. There is no discipline, just short term thinking due to bad incentives. http://www.thomaspalley.com/docs/articles/macro_theory/mmt_response_to_wray.pdf http://www.thomaspalley.com/docs/articles/macro_theory/mmt_r...
- sorcerer-mar 1y ago
  They make a lot of sense if you consider that the man up top is an actual stupid person and he is surrounded by sycophants. He has suggested for decades that he understands trade deficits to be identical to subsidies. He prefers mob-boss dynamics as opposed to mutual alliances. He legitimately thinks he can engineer a market economy's prices with his closed-door meetings with CEO buddies. It is gobsmackingly dumb, but remember we have no evidence of him being anything other than gobsmackingly dumb. It's a very parsimonious explanation of everything he does.
  - platevoltage 1y ago
    I mean, being born rich makes it way easier to fail upwards.
- Yeul 1y ago
  Trump having a plan would be the best outcome.
- suraci 1y ago
  [flagged]
- jbverschoor 1y ago
  It’s kind of logical right? The dollar was misused over 50 years. What’s the best way to get rid of your debt? Make the usd worthless. Various methods, but one: have another reserve currency in the world but make sure you have enough of that to stay powerful. He even gave the advice not to sell that one. It’s a good but toxic strategy. Give freely printed dollars in exchange for resources over 50years, and then make it worthless.
  - mindslight 1y ago
    But how is it in our interest to make it worthless? There seems to be this continued rhetorical touchstone framing "the debt" as some looming problem that will need to be reckoned with, as if people are thinking of it as household needing to pay off a credit card bill. But in reality, if the United States's debt went away then there would no longer be such thing as a greenback - our currency IS ENTIRELY government debt. I'll repeat that again - the government's debt is our money supply. And despite the continual monetary inflation, it still has been holding its value decently well. So where exactly is this desire to destroy the government debt (aka destroy our currency) really coming from, then?
- 9283409232 1y ago
  I've been saying for a while the goal is to eventually back the dollar with cryptocurrency that they all own.
hshdhdhj4444 1y ago
The article mentions the yield is the highest since November 2023. If I understand it correctly, this is different, however. In November the Fed was trying to increase rates to bring down inflation. But the high yields now are the result of a lack of private demand. If that is indeed the case it’s very likely worrying.
- nblgbg 1y ago
  Ofcourse that is the case, with tariffs the demand for dollar also going down and leads to this !
suraci 1y ago
[flagged]
onecommentman 1y ago
Some historical context over 40 years: https://www.macrotrends.net/2521/30-year-treasury-bond-rate-yield-chart https://www.macrotrends.net/2521/30-year-treasury-bond-rate-...
- tossandthrow 1y ago
  You need to the context of how much debt the government has. 4% on a couple of trillions is vastly different from 4% on 35 trillion. The metric you want to surveil is how much of the US tax revenue that goes to servicing this debt
6510 1y ago
I'm told the Wall Street folk will need to buy bonds or Trump will sink the ship. The question is, how do you expect him to refinance 7T in debt by the end of 25? Implode the dollar?
- Yeul 1y ago
  To be fair the US is too big to fail. As Europe was forced to "do whatever it takes" to save the euro and bail out Greece the entire world can't stand by and watch America sink.
  - trod1234 1y ago
    This is what happens when you let delusional bankers run things. Monetary policy fails in low interest rate environments, and you get chaotic whipsaws thereafter which grow with time. You can find reference to this if you know where to look as far back as the 1930s. Greedy corrupt blind individuals who have managed to infect leadership win so much that they lose everything. We are getting a front-row seat to the specifics described in the socialist calculation problem, and it won't stop with just the US. This type of fire keeps burning until the fuel is out.
  - tossandthrow 1y ago
    It is probably not going to be a big bang, but a slow fizz. The rest of the world will probably not let the usd be the reserve currency, if the US does not show that it is able to manage that.

62 points by inverted_flag 1y ago

doubtit 1y ago

[flagged]

13_9_7_7_5_18 1y ago
[dead]

mindslight 1y ago

Does anyone else have the sickening feeling that their actual plan is to straight up destroy USD, with the looters fleeing to hard assets and foreign/crypto currency, and the plebs' currency crisis then serving as the justification for naked fascism red in tooth and claw? With the narrative then shifting to the usual "Democrats did this! And we tried to stop it but we were too late!" nonsense, backed up by an army of "AI" spambots. The tariff tantrum, destroying US soft power institutions with DOGE, alienating all of our allies with petty feuds, the constant framing of the United States' enviable global positions as bad things. None of these things make any sense if you actually want the United States to succeed.

nemothekid 1y ago
>Does anyone else have the sickening feeling that their actual plan is to straight up destroy USD Stephen Miran, the chair of the Council of Economic Advisers under Trump, is pretty much trying to do this. He published 'A User's Guide to Restructuring the Global Trading System', and it pretty much outlines why they should destroy the USD - in order to bring manufacturing home, so that the warhawks will no longer have any reason to not start a war with China
- suraci 1y ago
  I like Stephen Miran, I always like people who are (relatively) honest > CEA Chairman Steve Miran Hudson Institute Event Remarks https://www.whitehouse.gov/briefings-statements/2025/04/cea-chairman-steve-miran-hudson-institute-event-remarks/ https://www.whitehouse.gov/briefings-statements/2025/04/cea-...
  - mindslight 1y ago
    It's a bit of a stretch to call this juxtaposition of topics, with absolutely zero analysis of how they're connected, honest: > we tax hardworking Americans mightily to finance global security. On the financial side, the reserve function of the dollar has caused persistent currency distortions and contributed, along with other countries’ unfair barriers to trade, to unsustainable trade deficits. Money is fungible between these two concerns. The excess demand for USD is a source of revenue for our economic empire, realized by the continual monetary inflation without nearly as much corresponding price inflation. Some of that monetary inflation has been used by the government (~"deficit spending"), but the sheer majority has been getting dumped into the financial industry to bid up existing assets as a handout to the rich. That is what has left the American worker high and dry - near complete inability for the US government to use that already-centralized revenue to help wider society, due to a political movement based around fake austerity. The article continues on using the passive voice to describe multiple things that the US government could have put a stop to any time it wanted, framed as if they were being done to us by other countries. For example: > in the years running up to the 2008 crash, China along with many foreign financial institutions, increased their holdings of U.S. mortgage debt, which helped fuel the housing bubble, forcing hundreds of billions of dollars of credit into the housing sector without regard as to whether the investments made sense Obviously if the government had set interest rates higher rather than lower, there would have been fewer mortgage bonds to buy and the dollars would have had to go elsewhere. I don't know if this pattern is deliberate or just an inevitable result of the bizzarro framing where having the world reserve currency is asserted to be a liability, but either way it is most certainly not honest.
    - suraci 1y ago
      (relatively) I call this kind of nonsense that can be seen through at a glance an 'relatively honest lie' those lines you quoted are nonsense that can be totally ignored without misunderstanding his point, those lines are like something as "get schwifty" > Second, they can get schwifty by opening their markets and buying more from America > Fifth, they could simply write checks to Treasury that help us get schwifty
ty6853 1y ago
Anyone with 0.1% of a brain switched to hard assets during the COVID ~0% money printing mania.
- hshdhdhj4444 1y ago
  And they would have lost a record increase in U.S. assets across the board, including the US dollar, which should have gone down if the problem was money printing. It’s rare to have such a clearly evident case of cause and effect. We know why yields are going up. Because investors don’t believe the U.S. government can control their budget deficits. The recent rising yields have little to do with money printing from 4-5 years ago.
  - hedora 1y ago
    Also, 0% interest was a thing for years before covid. It was pretty much the entire trump administration. (Back then, we bet on unprecedented inflation, and that’s been working out great so far.)
    - ty6853 1y ago
      Yes you're right. I was just too poor then to notice.
  - ty6853 1y ago
    When the US government can't control their budget deficits, one of the way they dissolve those liabilities is through inflationary activities.
jameslk 1y ago
This present issue has been caused by decades of bad fiscal policy by both parties: https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S Here for example, the Congressional Budget Office, forecasted federal debt as a percent of GDP would continue to rise unchecked, back in 2023: https://www.cbo.gov/publication/59014 https://www.cbo.gov/publication/59014 The only presidential politician who sounded the alarm was Ross Perot, all the way back in the 90s. Lyn Alden has been talking about this for a long time. If you want a good intro to the problem, I’d recommend this article of hers: https://www.lynalden.com/september-2024-newsletter/ https://www.lynalden.com/september-2024-newsletter/
- mindslight 1y ago
  > This present issue has been caused by decades of bad fiscal policy by both parties So I completely agree with this statement, but I completely disagree with the metric you've chosen to illustrate it. "National debt" only exists due to the martingale of the Federal Reserve neutering the government's own monetary sovereignty. If we need to have an inflationary currency, then the new money should be spent by Congress on deliberate public goals - it's another tax. You can tell "national debt" is a dodgy metric because it combines two very different things into one scary-in-the-context-of-household-finances thing. The portion of "the debt" that is Treasuries held by the Federal Reserve is the lesser bit of monetary creation that was actually spent for public goals, in spite of the fake "fiscal responsibility" narrative. It is moot as far as debt goes - nothing actually happens if it compounds to infinity. The other portion of "the debt" that is held by private/foreign owners is the government functioning as a bank account of last resort, and could very well just be at the central bank instead. What we currently have is a dog and pony show to pretend that we don't have this centralized fountain of money, in order for the financial industry to keep getting the first cut of low interest loans (which have mostly gone into bidding up the asset bubbles).
  - jameslk 1y ago
    This is basically a modern money theory view (correct me if I’m wrong)? It relies on discipline in the government to prevent inflation, e.g. raising taxes and cutting spending. But this is a similar problem to what we have already. There is no discipline, just short term thinking due to bad incentives. http://www.thomaspalley.com/docs/articles/macro_theory/mmt_response_to_wray.pdf http://www.thomaspalley.com/docs/articles/macro_theory/mmt_r...
sorcerer-mar 1y ago
They make a lot of sense if you consider that the man up top is an actual stupid person and he is surrounded by sycophants. He has suggested for decades that he understands trade deficits to be identical to subsidies. He prefers mob-boss dynamics as opposed to mutual alliances. He legitimately thinks he can engineer a market economy's prices with his closed-door meetings with CEO buddies. It is gobsmackingly dumb, but remember we have no evidence of him being anything other than gobsmackingly dumb. It's a very parsimonious explanation of everything he does.
- platevoltage 1y ago
  I mean, being born rich makes it way easier to fail upwards.
Yeul 1y ago
Trump having a plan would be the best outcome.
suraci 1y ago
[flagged]
jbverschoor 1y ago
It’s kind of logical right? The dollar was misused over 50 years. What’s the best way to get rid of your debt? Make the usd worthless. Various methods, but one: have another reserve currency in the world but make sure you have enough of that to stay powerful. He even gave the advice not to sell that one. It’s a good but toxic strategy. Give freely printed dollars in exchange for resources over 50years, and then make it worthless.
- mindslight 1y ago
  But how is it in our interest to make it worthless? There seems to be this continued rhetorical touchstone framing "the debt" as some looming problem that will need to be reckoned with, as if people are thinking of it as household needing to pay off a credit card bill. But in reality, if the United States's debt went away then there would no longer be such thing as a greenback - our currency IS ENTIRELY government debt. I'll repeat that again - the government's debt is our money supply. And despite the continual monetary inflation, it still has been holding its value decently well. So where exactly is this desire to destroy the government debt (aka destroy our currency) really coming from, then?
9283409232 1y ago
I've been saying for a while the goal is to eventually back the dollar with cryptocurrency that they all own.

hshdhdhj4444 1y ago

The article mentions the yield is the highest since November 2023. If I understand it correctly, this is different, however. In November the Fed was trying to increase rates to bring down inflation. But the high yields now are the result of a lack of private demand. If that is indeed the case it’s very likely worrying.

nblgbg 1y ago
Ofcourse that is the case, with tariffs the demand for dollar also going down and leads to this !

suraci 1y ago

[flagged]

onecommentman 1y ago

Some historical context over 40 years: https://www.macrotrends.net/2521/30-year-treasury-bond-rate-yield-chart https://www.macrotrends.net/2521/30-year-treasury-bond-rate-...

tossandthrow 1y ago
You need to the context of how much debt the government has. 4% on a couple of trillions is vastly different from 4% on 35 trillion. The metric you want to surveil is how much of the US tax revenue that goes to servicing this debt

6510 1y ago

I'm told the Wall Street folk will need to buy bonds or Trump will sink the ship. The question is, how do you expect him to refinance 7T in debt by the end of 25? Implode the dollar?

Yeul 1y ago
To be fair the US is too big to fail. As Europe was forced to "do whatever it takes" to save the euro and bail out Greece the entire world can't stand by and watch America sink.
- trod1234 1y ago
  This is what happens when you let delusional bankers run things. Monetary policy fails in low interest rate environments, and you get chaotic whipsaws thereafter which grow with time. You can find reference to this if you know where to look as far back as the 1930s. Greedy corrupt blind individuals who have managed to infect leadership win so much that they lose everything. We are getting a front-row seat to the specifics described in the socialist calculation problem, and it won't stop with just the US. This type of fire keeps burning until the fuel is out.
- tossandthrow 1y ago
  It is probably not going to be a big bang, but a slow fizz. The rest of the world will probably not let the usd be the reserve currency, if the US does not show that it is able to manage that.