Market Trends & Global Financial System - Investors are wary of longer-dated debt due to market volatility [1][4] - The financial system is repricing from a unipolar to a multipolar system [2] - Central banks are prioritizing financial stability over price stability, leading to higher inflation [3] Investment Strategies & Asset Allocation - Investors should consider hard assets like gold and private credit [3][4] - It's better to stay closer to home and position for upside in markets like equities or commodities [5] US Economic Outlook & Fiscal Policy - Tariffs won't generate enough capital to sustain the deficit [2] - The US may face austerity measures, including spending cuts, potentially starting in 2026 [2][5] - Voters are showing less tolerance for fiscal profligacy [6] - The US can continue spending at a clip of 6-7%, but eventually needs to find ways to fund the Treasury, cut spending, or depreciate the currency [7]

Market Trends & Bitcoin - Bitcoin reached a new all-time high just shy of $112,000 [1] - Bitcoin ETFs are seeing billions of dollars flowing in [1] - Bitcoin-related companies like Block and MicroStrategy are rising [1] Currency & Dollar Weakness - The dollar has declined over 10% year-to-date [3] - Lower front-end interest rates, reallocation out of the US, and hedging are driving dollar weakness [4][5] - The dollar's decline may continue due to allocation shifts and historical trends [6][7] - The dollar is at roughly fair value, but currencies never stop at fair value [6] Federal Reserve & Interest Rates - Expectation of less Fed independence is causing a change in Fed funds expectations next year, with the market expecting significantly lower interest rates around May/June [10] - Less Fed independence is causing slightly higher longer-term inflation expectations [10] - Foreign investors holding US treasuries in very short tenor bonds (three years and less) may let them expire, impacting demand [12] Treasury & Stablecoins - Relaxing the SLR (supplementary leverage ratio) could help Treasury demand [14] - Increased demand for stablecoins, backed by Treasury bills, could help short-end demand but steepen the yield curve [14][15] - The long end of the yield curve, impacting mortgage rates and business loans, will be hard for the Treasury to control [15] Equity Markets & Valuation - US stocks are fairly richly valued at 22 times 12-month forward price earnings, especially versus peers overseas [17] - Concentration and bullishness are increasing in equity markets [18] - Higher inflation and significantly slower growth are expected later this year [19]

Investment Strategy - BlackRock favors European government bonds over US Treasuries [1]

US Debt & National Security - US national debt is seen as a significant threat to national security, potentially squeezing the discretionary defense budget [2][3] - The US is expected to spend $90 billion more on interest payments than on defense in 2024, marking a critical tipping point [4] - Increased defense spending by $2 billion this year and $150 billion over the next decade is projected due to recent tax and spending legislation [4] - The law will boost interest costs by $700 billion [4] - Adversaries like Russia and China may view US debt levels as a vulnerability [5] International Implications - China, a large foreign holder of US treasuries, has been steadily reducing its holdings [6] - Japan holds over $1 trillion worth of US debt, the most of any foreign country [6] - Reworking global trade relationships could impact international demand for treasuries and the US dollar [7][9] - Tariffs announced with Japan speak to the leverage that Japanese investors may have in trade talks [8] Potential Solutions & Challenges - Addressing the deficit requires a combination of spending cuts, tax increases, and a rainy day fund [11] - Solving the problem solely through tax revenue would require a 30% tax increase, while solving it solely through spending cuts would require a 25% spending cut [12] - Political divide is considered a major threat, potentially hindering efforts to address the debt issue [13]

🇺🇸 LATEST: Arthur Hayes argues US banks adopting stablecoins can provide $6.8 trillion of buying power for US Treasuries.He sees this as "debt monetization dressed in Ethereum drag" and advises to go long Bitcoin. https://t.co/xeSJnXclVf ...

Investment Strategy - South Korea's sovereign wealth fund, valued at $206.5 billion, maintains US Treasuries as a core holding [1] - The fund remains confident in US Treasuries despite recent market volatility [1]

US Treasuries fall, trimming their weekly advance https://t.co/ba8XjsotCe ...

All right. Well, even with the bid for treasuries and the US dollar today, Bank of America's new global fund manager survey sees falling demand for US assets, it also finds investors are more underweight the dollar than they've been in two decades. Our next guest sees this as a potential game-changing moment for the greenback.Peter Bookar is the chief investment officer at Blekeley Financial Group. He's also a CNBC contributor. Peter, great to have you with us.you know, with the dollar with the spade of dol ...

In the last of 15 years, there's been a number of corrections on the 500 and in every single one of them. When the S&P goes down more than 10%, the dollar index, the trade weighted dollar index goes up. This time.The dollar went down when the S&P 500 went down almost 20%. That's that's strange. Things are behaving differently.Usually when the Fed starts cutting interest rates, rates across the yield curve go down. The ten year Treasury almost always goes up immediately following the first Fed rate rate cut, ...