UST no longer safe haven?

[DFR6868]

Goldman Sachs basically saying that the “flight to safety” characteristics that made the USD the global reserve currency no longer function and so investors need more gold. Without USD hegemony the US will have structurally high interest rates for the foreseeable future.

 

[DFR6868]

The Tariffs Were Struck Down But Yields Spiked. Why? Today’s ruling by the U.S. Court of International Trade, which struck down the Trump administration’s tariff regime, triggered an immediate and seemingly paradoxical reaction in the bond market. Rather than declining on what should have been a deflationary catalyst removing trade barriers the 10-year Treasury yield surged past 4.50%. The 2-year jumped even more sharply, rising over 1% on the day. To many, this appeared to confirm the idea that tariffs, trade deals, and geopolitical posturing no longer move the needle. But that interpretation misreads the signal. The bond market is not expressing indifference it is issuing a warning. The removal of tariffs was not seen as a stabilizing event. Instead, it underscored a deeper problem: a breakdown in coordinated economic governance. In principle, eliminating tariffs should reduce input costs, alleviate supply chain friction, and soften inflation expectations. In practice, it revealed that policy direction in Washington has fractured. The fact that a judicial body not Congress or the executive branch was responsible for this reversal only reinforced the sense that no one is driving the macroeconomic ship. Markets took one look and priced in disorder. The sharp bear steepening of the yield curve reflects this institutional dissonance. The front end of the curve moved most aggressively, suggesting the market is pushing out expectations for rate cuts. That could indicate inflation fears, but given the context waning consumer demand, falling PPI, and deflationary pressures out of China it is far more likely to be a response to perceived fiscal instability. The long end also rose, but more modestly. This is not the curve of a healthy expansion. It’s the curve of a bond market beginning to question the solvency and credibility of its issuer. What’s changed beneath the surface is the structural capacity to absorb U.S. debt. Net Treasury issuance remains near record highs, the Fed is no longer a buyer through QT, and foreign official institutions are in retreat. Recent auctions have already shown signs of strain soft bid-to-cover ratios, heavy dealer allocations, and waning indirect demand. Striking down tariffs doesn’t fix that it exacerbates it, by removing one of the few remaining artificial caps on goods inflation without providing any corresponding fiscal restraint or monetary accommodation. Layered on top of this is a fragile financial plumbing system. Deeply negative SOFR swap spreads, elevated basis trades, and deteriorating liquidity conditions in UST futures all suggest that the market is approaching a breaking point. Convexity hedging and duration extensions by large institutional players can easily turn a 10–20 bps move into something reflexive and disorderly. That’s likely part of what we saw today: not just a repricing of policy risk, but the mechanical consequences of a bond market that is increasingly brittle. There are historical echoes. In 1969, as the Nixon administration veered between protectionism and international coordination, yields surged in anticipation of what became the Nixon Shock. In 2013, Bernanke’s taper announcement rattled markets not because of the action itself, but because it revealed just how dependent the system had become on artificial support. More recently, the UK’s 2022 gilt crisis showed how even the perception of incoherent policy could spiral into a full-blown funding panic. The U.S. may be entering a similar phase. The striking down of tariffs should have bought breathing room. Instead, it exposed the vacuum of leadership and the fragility of the broader macroeconomic regime. The market’s message is not that tariffs don’t matter it’s that, without a cohesive fiscal, monetary, and trade framework, no individual lever matters anymore. That is not a return to normal it is a systemic red flag.

 

[DFR6868]

trump eo card declined...
there will be refunds



*SECOND COURT STRIKES DOWN TRUMP’S TARIFFS This is amazing stuff. The floodgates are open now. Expect many more lawsuits now. Thousands of businesses are also owed back pay for all the tariffs they were illegally forced to pay.

small biz takes the hit and no refunds apparently while big ones have ftz and bonded warehouses...




Something else that’s just mind blowing: There were importers who paid 145% AFAICT they don’t get that money back What a mess



Supply chain executives use just-in-time inventory management systems to carefully balance forecasted demand, against the high costs of stocking goods. But the escalation of tariffs between the US and China compelled them to fill all available warehouse space, in the hope that a resolution would be reached before tripling prices at the retail level. Foreign Trade Zones were a valuable tool to this end. FTZ's are scattered throughout the United States, and serve vast areas of the country. Wholesalers can legally import and stockpile product in bonded warehouses in FTZ's, and delay paying tariffs until the goods are withdrawn for sale or use. Supply chain executives took an expensive gamble that the tariffs would come down before their shelves emptied, and even directed Chinese shipments to warehouses in Canada to further build out available stock. With the tariff rates dropping from 145%-plus, to 30%, products can come out of the FTZ facilities and into stores, with sufficient additional stock pending the arrival of new shipments from Asia.

 

[DFR6868]

trump eo card now accepted again



*US APPEALS COURT REINSTATES TRUMP TARIFFS DURING APPEAL Stocks selling off fast on the news.




"But that interpretation misreads the signal. The bond market is not expressing indifference it is issuing a warning. The removal of tariffs was not seen as a stabilizing event. Instead, it underscored a deeper problem: a breakdown in coordinated economic governance. ..."

The Tariffs Were Struck Down But Yields Spiked. Why? Today’s ruling by the U.S. Court of International Trade, which struck down the Trump administration’s tariff regime, triggered an immediate and seemingly paradoxical reaction in the bond market. Rather than declining on what should have been a deflationary catalyst removing trade barriers the 10-year Treasury yield surged past 4.50%. The 2-year jumped even more sharply, rising over 1% on the day. To many, this appeared to confirm the idea that tariffs, trade deals, and geopolitical posturing no longer move the needle. But that interpretation misreads the signal. The bond market is not expressing indifference it is issuing a warning. The removal of tariffs was not seen as a stabilizing event. Instead, it underscored a deeper problem: a breakdown in coordinated economic governance. In principle, eliminating tariffs should reduce input costs, alleviate supply chain friction, and soften inflation expectations. In practice, it revealed that policy direction in Washington has fractured. The fact that a judicial body not Congress or the executive branch was responsible for this reversal only reinforced the sense that no one is driving the macroeconomic ship. Markets took one look and priced in disorder. The sharp bear steepening of the yield curve reflects this institutional dissonance. The front end of the curve moved most aggressively, suggesting the market is pushing out expectations for rate cuts. That could indicate inflation fears, but given the context waning consumer demand, falling PPI, and deflationary pressures out of China it is far more likely to be a response to perceived fiscal instability. The long end also rose, but more modestly. This is not the curve of a healthy expansion. It’s the curve of a bond market beginning to question the solvency and credibility of its issuer. What’s changed beneath the surface is the structural capacity to absorb U.S. debt. Net Treasury issuance remains near record highs, the Fed is no longer a buyer through QT, and foreign official institutions are in retreat. Recent auctions have already shown signs of strain soft bid-to-cover ratios, heavy dealer allocations, and waning indirect demand. Striking down tariffs doesn’t fix that it exacerbates it, by removing one of the few remaining artificial caps on goods inflation without providing any corresponding fiscal restraint or monetary accommodation. Layered on top of this is a fragile financial plumbing system. Deeply negative SOFR swap spreads, elevated basis trades, and deteriorating liquidity conditions in UST futures all suggest that the market is approaching a breaking point. Convexity hedging and duration extensions by large institutional players can easily turn a 10–20 bps move into something reflexive and disorderly. That’s likely part of what we saw today: not just a repricing of policy risk, but the mechanical consequences of a bond market that is increasingly brittle. There are historical echoes. In 1969, as the Nixon administration veered between protectionism and international coordination, yields surged in anticipation of what became the Nixon Shock. In 2013, Bernanke’s taper announcement rattled markets not because of the action itself, but because it revealed just how dependent the system had become on artificial support. More recently, the UK’s 2022 gilt crisis showed how even the perception of incoherent policy could spiral into a full-blown funding panic. The U.S. may be entering a similar phase. The striking down of tariffs should have bought breathing room. Instead, it exposed the vacuum of leadership and the fragility of the broader macroeconomic regime. The market’s message is not that tariffs don’t matter it’s that, without a cohesive fiscal, monetary, and trade framework, no individual lever matters anymore. That is not a return to normal it is a systemic red flag.

 

[DFR6868]

trump being trump again...






grok

• The X post by Doncho Gunchev questions if Trump misrepresented receiving a Boeing 747-8 from Qatar as a gift, referencing a Washington Post report that Trump requested the plane, contradicting his claim of it being a generous offer from Qatar.
• Qatar’s demand for a White House memo to confirm Trump initiated the request highlights legal concerns, including the Foreign Emoluments Clause, which prohibits federal officeholders from accepting foreign gifts without Congressional consent, raising ethical questions about influence.
• Trump’s narrative of the plane as a “sovereign-to-sovereign gift” to the U.S. Air Force is under scrutiny, as the deal—valued at $400 million—remains unfinalized, with Qatar seeking clarity on future ownership liabilities amid bipartisan criticism of potential corruption.

 

[DFR6868]

yup trump and his team has a divine mission all right
though the zhen ming is black is now white and white is now black



grok

• Section 899 of the "One Big Beautiful Bill Act," passed by the U.S. House in May 2025, targets foreign investors from countries with "discriminatory" tax policies, like France's 3% digital services tax on U.S. tech giants, by raising U.S. income taxes on them by 5% annually, up to 20%, potentially chilling foreign investment.
• This provision is a retaliatory move against the OECD's Pillar I and II global tax frameworks, which include a 15% global minimum tax to curb tax competition, a policy the U.S. sees as unfairly targeting its corporations, risking a broader trade conflict.
• Wall Street fears this could deter $5.1 trillion in projected foreign investments, as noted in X replies, accelerating de-dollarization trends—already underway with the U.S. dollar's share in global transactions dropping from 88% in 2025, per Israilov Financial data—potentially destabilizing American markets.

 

[DFR6868]

when has stanchart ever been so "definitive" (correct me if i am wrong)
maybe using ai or maybe
they read this thread and understand my daoist intuition that the hockey stick crisis lky once 'campaign' heavily to washington dc about in the late 1990s if i remember right, the event horizon for the crisis is now before us
lky was around 25 years too early and lhl obviously didn't heed

geopolitical implications not covered
especially what will happen to israel when its godfather is weak
will putin step in for them?



A Downturn Signal Rooted in U.S. Debt Dynamics On May 28, 2025, Standard Chartered issued a stark warning: the U.S. dollar could face a major drop in 2026. The cause isn’t just cyclical FX volatility it’s structural debt fragility, eroding demand for Treasuries, and the quiet unwinding of global trust in U.S. fiscal management.

⸻ 1. The Core Thesis: U.S. Debt Is Now a Monetary Liability Standard Chartered’s warning aligns with a broader trend: the world is no longer viewing U.S. debt as a safe haven it’s starting to view it as a fiscal time bomb. •U.S. national debt has crossed $36.5 trillion, with debt-to-GDP projected to hit 125% by the mid-2030s. •Net interest payments on U.S. debt are set to outpace defense spending by 2026. •The Treasury’s dependency on short-term rollovers has made it hypersensitive to interest rate moves. This isn’t about theoretical default. It’s about saturation risk: what happens when the world simply doesn’t want more U.S. debt even at higher yields?
⸻ 2. Standard Chartered’s Key Concern: A Dollar Repricing Cycle Is Brewing The bank suggests the dollar is vulnerable not just to macro headwinds, but to a multi-variable reset: •Foreign central banks are diversifying away from USD. •Real yields are rising, but investor confidence isn’t. The premium is not attracting the capital flows it used to. •Fiscal credibility is deteriorating. With 2026 elections looming, both parties are prioritizing stimulus, not austerity. What’s coming is not just a correction. It could be a repricing of the dollar’s role in global capital flows.
⸻ 3. Markets Are Already Whispering This •Treasury auctions in Q2 2025 have shown persistent soft demand, even from traditional allies like Japan and the UK. •The dollar index (DXY) has broken technical support, reflecting growing skepticism in institutional FX flows. •Bond vigilantes are re-emerging. This is no longer about Fed guidance it’s about credibility risk.
⸻ 4. The Liquidity Trap Behind the Curtain If the dollar weakens in 2026, it may not be because of inflation or recession. It may be because of liquidity preference collapse a moment when global buyers no longer believe that U.S. debt is the best place to store long-term value. •Foreign buyers are increasingly moving into gold, euros, and even selective Asian sovereigns. •The Fed is quietly absorbing more debt than they admit, often through indirect market mechanisms. •The Supplemental Leverage Ratio (SLR) discussions are a sign the system is forcing banks to carry more Treasuries because organic demand is evaporating. This is stealth QE performed not out of stimulus, but out of desperation.
⸻ 5. Global Context: The Dollar’s Role Is Shifting China is increasing stimulus and may soon outpace U.S. growth as a demand engine. •The yuan is gaining slow but steady FX reserve share, particularly in the Global South and Belt & Road nations. •BRICS+ trade settlements bypassing the dollar are no longer isolated events they are snowballing. •Countries are hedging future sanctions risk by building bilateral currency agreements. If 2022–2024 was the warning, 2026 may be the pivot.
⸻ 6. What the Headlines Don’t Say: This Is About Trust, Not Math Standard Chartered’s warning is not just an FX trade call. It’s a macro signal. •You can delay default. •You can extend maturities. •You can manipulate short-term yields. But you can’t indefinitely force the world to believe in the dollar.
⸻ 7. Final Synthesis: The U.S. dollar is facing a fundamental test not of valuation, but of narrative. Standard Chartered is pointing to a future where: •Dollar hegemony fragments •U.S. debt credibility erodes •Foreign demand becomes conditional, not automatic •Safe haven status is no longer guaranteed What breaks first won’t be the dollar itself. It will be the assumption that there will always be someone else to buy the debt.

 

[DFR6868]

Paul and Ken discuss the gigantic financial ticking time bomb, exacerbated by raised interest rates, which will undoubtedly take down the Western financial system. But as ever, this is event-driven rather than time-driven.

 

[DFR6868]

Studies are starting to come out showing that the USD's "flight to safety" mechanism is dead. That means the beginning of the end of the reserve status of the currency.

 

[DFR6868]

The U.S. Bond Market Drawdown Is Now the Longest in History | What It Actually Tells Us The U.S. bond market measured by the Bloomberg U.S. Aggregate Bond Index has been in a drawdown for 58 consecutive months. This is by far the longest drawdown in the history of the index, with a cumulative decline of 17.2 percent since the peak in August 2020. For comparison, the second-longest drawdown (July 1980 to October 1981) lasted only 16 months. But this isn’t just a historical anomaly. It’s a symptom of a deeper structural shift in the global financial order.
...

 

[DFR6868]

https://www.independent.co.uk/tv/ne...-partying-jeffrey-epstein-video-b2765067.html

Musk shares footage of Trump partying with Jeffrey Epstein as feud intensifies​

Elon Musk has shared a video of Donald Trump partying with the disgraced paedophile Jeffrey Epstein in 1992.
Footage from a NBC broadcast shows the future president and Mr Epstein surrounded by dancing women, with Mr Trump gesturing to one and mouthing “she’s hot”.
Mr Musk shared the clip on Thursday (5 June), after claiming that the president has not made Epstein files public because he features in them.

so will the zionists get the rug pulled out under their feet?
can profit motive overcome the dirt they have on various individuals...




Here’s what’s really happening between US & Israel.

Palestinian freedom is only now within reach because China brokered the normalization between Saudi Arabia and Iran, and Egypt and Jordan stood their ground—refusing U.S. demands to ethnically cleanse the Palestinians.

Meanwhile, #Trump is preparing to sell off America’s AI and robotics infrastructure to the UAE, Qatar, and Saudi Arabia.

That’s why he’s heading to “kiss the ring” next week. And you can bet it’ll come packaged with some strategic treasury investments to help roll over U.S. debt. Trump isn’t saving America—he’s asset-stripping it.

Zionism & genocide is no longer profitable. And the price foreign investors are demanding in return is nothing less than decolonization. That’s the part of the story he won’t tell you. But mark my words—if Palestine is finally freed, he’ll be first in line to claim a Nobel Peace Prize for it.

The price is worth the global freedom. April 2 liberated the world from the dollar.

I’ll admit I’m wrong if he Ends The Fed as that’s the real America-First action. Now Americans. Free yourself from the #Fed & dollar with #Bitcoin The truth will set you free.

https://youtube.com/live/CktzjtIlYC8?si=zVZ3uUmtbbKzk2Fi

 

[DFR6868]

Foreigners are DUMPING US equities: According to Goldman Sachs data, foreigners sold $44 BILLION in US stocks over the past two months. Year-to-date, net withdrawals have reached $31 billion. Capital is gradually going back home amid historic policy uncertainty.

 

[DFR6868]

As I've been highlighting recently, don't look to US Treasuries for "safe haven" or "flight to quality" flows. Their yields barely budged after the Israeli attack on Iran. Instead, watch gold (below) and silver. The flows are happening; they're just not headed to Treasuries as historical experience would suggest. (This is further discussed in my FT column this morning.)

 

[DFR6868]

sinodollar market - market floating around outside swift



How did all the national states side-step the US dollar milkshake? That fiat vacuum that generates its own demand and gives it “exorbitant privilege”

What we may be witnessing is the early failure of the dollar’s reflexive demand loop, the ‘milkshake’ premise depends on relative scarcity, but if sovereigns and large institutions no longer reflexively bid USD assets in moments of global stress, the architecture breaks. Whether due to weaponization risk, currency hedging costs, or alternative liquidity channels (CIPS, bilateral swaps, gold), the demand for dollars is no longer automatic. Exorbitant privilege only survives as long as it’s viewed as a safe privilege and not a trap.

 

[DFR6868]

https://finance.yahoo.com/news/many-exporters-no-longer-want-150224714.html

Many Exporters No Longer Want Dollars, US Bank Executive Says​

Carter Johnson
Mon, June 16, 2025 at 11:02 PM GMT+8

When Paula Comings, the head of currency sales for US Bancorp, talks to US importers, she increasingly hears the same message: Their foreign counterparties no longer want to be paid in dollars.

...

 

[DFR6868]

https://www.quarterlyessay.com.au/essay/2025/06/hard-new-world/extract

Our Post-American Future​

Hugh White

...

Ever since Imperial Japan destroyed Britain’s position in Asia almost eighty-four years ago, our security and our place in the international system have been built upon our dependence on America, formalised seventy-four years ago in the ANZUS Treaty. Now that long era is ending, and we come face to face with our post-American future.

...

 

[DFR6868]

THE WEST'S GRIP on Asia is slipping. New South Korean leader Lee Jae Myung and Japanese Prime Minister Shigeru Ishiba said they will not be attending the NATO summit which begins tomorrow (Tuesday) in the Hague, in the Netherlands. Those two nations have until now been the most obedient bridgeheads of United States hegemony in Asia, the region that contains the majority of humanity. A planned side meeting of America's four main Asia-Pacific military outposts—Japan, South Korea, Australia and New Zealand—will no longer take place.

...

 

[DFR6868]

What we’re likely witnessing here is the quiet construction of a parallel settlement infrastructure, one that leverages gold as a neutral reserve asset to facilitate bilateral trade outside the U.S. dominated financial system. The steady rise in Chinese exports to Saudi Arabia, paired with the surge in Swiss gold exports to the Kingdom, points to something deeper than just trade growth or portfolio diversification. The fact that Saudi gold imports are spiking despite oil revenues being below fiscal breakeven strongly suggests that this gold isn’t being bought with excess petrodollar income, it’s potentially being acquired as settlement, collateral, or insurance in non-dollar trade arrangements. This is not de-dollarization through headline declarations or sanctions retaliation, it’s the slow reconfiguration of trust. If Saudi Arabia is accepting yuan for a portion of its oil exports to China, then gold offers a centuries old solution to the risk of holding a non reserve, politically vulnerable currency. Gold in this case may serve as the buffer, an asset that restores balance and confidence in settlement without the need for Western intermediaries or dollar recycling. The fact that this gold is moving through Switzerland, still the global refining and vaulting hub adds another layer of plausibility. It’s the ideal venue for obfuscating trade origin and final ownership, especially if a growing share of the world is trying to build escape ramps from the dollar-centric order. This could also signal the early formation of a distributed gold for commodities architecture, one that is being pieced together by BRICS+ economies, particularly those with strong mining bases, large reserves, or state control over trade flows. If so, we should be watching not just China and Saudi Arabia, but also opaque financial nodes like the UAE (with its bullion hubs and shadow banking reach), Turkey (a gold trading corridor with unique East-West ties), and Hong Kong (the legacy offshore yuan market and re-export transit hub). These players can serve as intermediaries, disguising the bilateral nature of trade flows under multilateral shipping, refining, or customs operations. In essence, we may be seeing a modern adaptation of the old Eurodollar system, but instead of offshore dollar liabilities, this system is built around off market gold settlement and physical collateral chains. It would not require a new currency, only a new clearing logic, one that restores the function of settlement without dependence on Western financial credibility. And it would explain why gold remains in such strong demand globally, even as interest rates rise and real yields turn positive. In this emerging system, gold doesn’t move because it’s a speculative asset, it moves because it’s doing work. It settles, it balances, and it insulates. The implications are enormous. This signals that trust, historically outsourced to Western central banks and legal systems is now being re-insourced into hard assets and bilateral agreements. If sustained, this shift could gradually erode the “network effect” of the dollar not by rebellion, but by redundancy. And it won’t be obvious. It will unfold through shipping manifests, customs records, refinery output logs, and settlement anomalies that only make sense in hindsight. This isn’t just a chart. It’s a signal, one that suggests the new monetary architecture is already under construction. Quietly, deliberately, and physically.

 

[DFR6868]

no milkshake



Why is the USD dropping if interest rates are too high? Shouldn’t it be the opposite? Something doesn’t smell right.

 

[DFR6868]

The Dollar death is accelerating fast. DXY crashed to 97.2 - lowest since February 2022. Down 12% in 2025 alone, worst performance in 40 years. World is dumping dollars while mysterious buyer absorbs all US debt. Fed's stealth QE?