Beware The Great Unwind
By Alasdair Macleod – August 2023
[Matthias Chang’s comments; I have been warning Malaysians to wake up. But like typical arseholes, they cannot be bothered, still intellectually masturbating on the State Elections which was concluded on Saturday, 12th August 2023. The clueless politicians are still focusing on power and how to maintain power. Soon, very soon Malaysia will end up as a failed state, divided and financially ruined. The largest set of voters, the Malay community will be ruined economically. Historically, and till the present times, it is the money-class that dictates to the arseholes who supposedly wield power and in control. BS! Money dictates to political power. Soon foreign money will dictate to the politicians and they will crawl for crumbs, like the Ukrainian political morons!]
Article begins below:
This chart strongly suggests that US Treasury bond yields, widely regarded as the risk-free yardstick against which all other credit is measured are going significantly higher, not stabilising close to current levels before going lower as commonly believed. I conclude that US Treasury bond yields could easily double, and the political class will be powerless to stop them going even higher. The implications for interest rates globally are that they will be forced considerably higher as well.
This article concludes that reasoned analysis takes us to this inevitable conclusion. It is consistent with the end of the post Bretton Woods fiat currency era, and the return to credit backed by real values.
The collapse of unbacked credit’s value was only a matter of time, which is now rapidly approaching. The Great Unwind is under way. It is the consequence of monetary and currency distortions which have accumulated since the end of Bretton Woods fifty-two years ago. It will not be a trivial matter.
The trigger will be capital flows leaving the dollar, creating a funding crisis for the US Government. Foreigners, who have accumulated $32 trillion in deposits and other dollar-denominated financial assets will no longer need to maintain dollar balances to the same extent, perhaps even paring them back to a minimum.
Furthermore, economic factors are turning sharply negative with energy prices rising ahead of the Northern Hemisphere winter, springing debt traps on western alliance governments. So how could bond yields possibly decline materially in the coming months?
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