I’ve tried not to pay too close attention to the panicked aftermath of the new tariff regime.
I don’t trade the public markets actively and we’d already made preparations in our personal financial lives for a deleveraged dollar. It seemed clear where things were headed and weakening the dollar solves a couple problems for America.
I am a free trader. I believe in open markets as the most effective means we currently have at our disposal for large scale coordination that works with human nature.
Nevertheless the allure of central planning and collectivism is hard to resist for those in power. The market will adapt and find other ways of allocating assets but the wasted energy of a crisis frustrates investors. Damming the waters only impeded flow.
Each basis point drop saves America 1 billion according to Secretary Bessent. So we’ve an incentive to nuke 30 basis points and keep yields low. And yet the 10 year is still stubbornly high.
The exorbitant privilege of Bretton Woods comes with the fears of a centralized currency managed by technocrats who must give guidance to markets without providing too many surprises.
I grew up with a significant amount of skepticism around the federal reserve and its places to hippie parents and the University of Chicago but even I never thought I’d live to see this kind of test. And I am a Bitcoiner! Maybe Silicon Valley will finally find out what bargain we have with Uncle Sam.