Written by Bryan Lutz, Editor at Dollarcollapse.com:
Every Sunday morning I sit down to write a few thoughts.
Sometimes these thoughts end up being about life, other times they are on gold, geopolitical issues affecting the markets, or the economy.
Here are three thoughts for this morning:
1. Bonds. Cheap Bonds.
US government bonds are generally considered among the most liquid assets in the world.
That’s because…
- The US government is seen as a safe borrower.
- There’s constant demand from banks, funds, central banks, and governments.
- Large volumes are traded daily.
Yet, liquidity is drying up in the Treasury market. Few people want to buy, sell, or trade government bonds.
@KolbessiLetter on Twitter reports this:
“Government bond liquidity has never been worse:
The Bloomberg Government Bond Liquidity Index hit a record 6.5 points on Monday.
A higher reading in this index means LESS liquidity for global bond markets.
The index has DOUBLED over the last several months, as government spending surged in the US and Japan. This means liquidity is now worse than during the 2008 Financial Crisis.
As a result, long-term government bonds are selling off, with Japan’s 30Y bond yield hitting 3.15%, the second-highest level since its debut in 1999.
At the same time, the 30Y Treasury yield is approaching 5.00% for the first time since May.”
If confidence in US Treasuries doesn’t stabilize we’ll be looking at even cheaper bonds in the future, higher yields, and an even greater flight to gold, silver, and maybe Bitcoin.
Something ought to change soon, or else.
2. Fiat money has brought us all sorts of luxuries. Except a life full of relationships.
The glam.
The child-free life is all the glam these days, celebrated to no end. You can have it all.
Just without the children.
Oh, and ironically, once you have it all. There’s this…
On average, nine hours of alone time each day once you hit your mid 60s. I’m sure the introverts among us are already rejoicing, but the trend speaks to a larger cultural narrative.
Nihilism.
We have it all.
Yet, we agree to have it all only for a moment and without a future. We’ve forgotten what it means to value family, the wisdom of the past, and the knowledge of elders, and replaced them with Google searches, YouTube University, and the latest ChatGPT. All this available in the palm of our hands.
And in our old age, in the soon-to-be future… Our bedside with a very caring robot.
Anyway, that is a bit of bleak outlook. According to the Fourth Turning, and cycle theories, we are returning to family values.
Some of those values (outside of the traditional Christian view) can be found in Bill Bonner’s Family Fortunes: How to build wealth and hold it for 100 years.
It is an exceptionally good read for those entering into first generation wealth, and possibly for all those young gold and crypto millionaires out there who will soon start thinking about their legacy.
3. The “Blockbuster Effect” is coming for regional banks. Why store your money in a regional bank when you can access your money from your phone via stablecoins? But maybe, regional gold and silver storage facilities will also become more common?
Since 1971, the US dollar hasn’t been much but numbers in a computer.
Stablecoins – digital coins tethered to the value of the USD are no different.
Porter and Co. recently posted about this on X.
“The reason banks exist is because they safeguard our money and facilitate payments.”
Stablecoins allow you to skip the middleman, the bank.
Why keep your money at a bank to pay their fees when you can attach those tokens to an address on a digital wallet on your phone, home computer, or some other device(maybe something like an interact card)?
Banks just won’t make as much sense anymore.
Just as online streaming platforms like Netflix skipped the middleman by eliminating the need for physical rentals, there is no longer a need for banks to store our numbers in a computer.
You can do that yourself.
But then there’s our precious metal stashes.
You can only store so much of your own gold and silver, and banks used to facilitate that…
Maybe we’ll see more localized bullion storage centers as wealth becomes increasingly individualized.
