BTC and Gold in Sweet Spot as Bond Market Smackdown Exposes ‘The U.S. Fiscal Kayfabe’: Godbole
The post BTC and Gold in Sweet Spot as Bond Market Smackdown Exposes ‘The U.S. Fiscal Kayfabe’: Godbole appeared on BitcoinEthereumNews.com. There is a popular saying, that goes, “If you want to understand America, watch a pro wrestling match.” Though it may be glib and a little over simplified, it appears to ‘ring’ true, as the U.S. financial markets are now exhibiting traits similar to pro-wrestling’s concept of “kayfabe.” Kayfabe means an illusion that the in-ring scripted action is real, with the audience buying the same while suspending their belief for entertainment. A similar dynamic has played out in the financial market for at least a decade, where the U.S. government has repeatedly hit its self-imposed debt ceiling, or borrowing limit, a sign of fiscal crisis. Still, investors continued lending money to the government at ultra-low yields, including during times of stress in the global economy, thereby maintaining the kayfabe that the government is a safe and reliable borrower. Recently, however, bond market participants have exposed kayfabe, as legendary trader Paul Tudor Jones had warned, weakening the illusion and strengthening the case for investing in assets with haven and store-of-value appeal like bitcoin (BTC) and gold. Bonds blast the kayfabe This week’s big news is the U.S. 30-year Treasury yield topping the 5% mark and how it could destabilize financial markets. However, we have been there before in October last year, according to the data source TradingView. Read more: U.S. 30-Year Treasury Yield Breaches 5% Amid Moody’s Rating Downgrade, Fiscal Concerns The real story is the spike in yields on the Treasury inflation-protected securities (TIPS). Their principal amount is adjusted for inflation. The 30-year TIPS yield recently rose above 2.7%, the highest since 2001. In other words, investors demand a yield at least 2.7% greater than inflation in return for loaning money to the government for three decades. This comes as the consumer price index (CPI) growth continued to slow toward…
The post BTC and Gold in Sweet Spot as Bond Market Smackdown Exposes ‘The U.S. Fiscal Kayfabe’: Godbole appeared on BitcoinEthereumNews.com.
There is a popular saying, that goes, “If you want to understand America, watch a pro wrestling match.” Though it may be glib and a little over simplified, it appears to ‘ring’ true, as the U.S. financial markets are now exhibiting traits similar to pro-wrestling’s concept of “kayfabe.” Kayfabe means an illusion that the in-ring scripted action is real, with the audience buying the same while suspending their belief for entertainment. A similar dynamic has played out in the financial market for at least a decade, where the U.S. government has repeatedly hit its self-imposed debt ceiling, or borrowing limit, a sign of fiscal crisis. Still, investors continued lending money to the government at ultra-low yields, including during times of stress in the global economy, thereby maintaining the kayfabe that the government is a safe and reliable borrower. Recently, however, bond market participants have exposed kayfabe, as legendary trader Paul Tudor Jones had warned, weakening the illusion and strengthening the case for investing in assets with haven and store-of-value appeal like bitcoin (BTC) and gold. Bonds blast the kayfabe This week’s big news is the U.S. 30-year Treasury yield topping the 5% mark and how it could destabilize financial markets. However, we have been there before in October last year, according to the data source TradingView. Read more: U.S. 30-Year Treasury Yield Breaches 5% Amid Moody’s Rating Downgrade, Fiscal Concerns The real story is the spike in yields on the Treasury inflation-protected securities (TIPS). Their principal amount is adjusted for inflation. The 30-year TIPS yield recently rose above 2.7%, the highest since 2001. In other words, investors demand a yield at least 2.7% greater than inflation in return for loaning money to the government for three decades. This comes as the consumer price index (CPI) growth continued to slow toward…
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