🇺🇸 Every day the Iran war drags on, America’s $40 TRILLION debt gets more expensive to carry.
The 10-year Treasury yield has shot up from about 4% in February to above 5%, its highest since 2007.
Oil hovering near $100 is keeping inflation stubborn, and the Fed is back to HIKING rates.
With a debt that size, every bump hurts.
Washington is already burning through more than $3 BILLION A DAY just on interest.
That’s $963 BILLION in the first 10 months of the fiscal year, up 14% on last year, and that’s money going NOWHERE near schools, roads or soldiers.
For 50 years, the petrodollar deal kept the machine running: Gulf states sold their oil in dollars and parked the cash right back in U.S. Treasuries.
Now the war is choking their exports, and Saudi Arabia and the UAE dumped nearly $17 billion of U.S. debt in March alone.
Fewer buyers, more debt, higher rates. It’s a vicious circle, and every turn makes the next one worse.
Who’s going to foot that bill? Spoiler: it’s American taxpayers.
Sources: Yahoo Finance, Fortune, Semafor / Writer: Julie
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David Levenson. I am increasing low beta leverage. @PolarityRadio ·
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I wave clarification every day. The ward drags on the oil market gets closer to where US yields breakdown because of higher real cost of money, and that breaks the back of the financial speculators who are holding up oil prices and then they reverse direction and then they suppress oil prices because oil prices have a $40 range from where it can trade based on bullish oil speculation, and bearish oil speculation so watch for yields to continue melting down at the long end of the US treasury curve, is those yields get dragged down by the rise of real rates and then that higher real cost of balance sheets, forces down oil volatility, which then drags down oil prices.
The administration just ruled out nuclear and troops so it’s only a matter of time no matter what Zelinsky or Houthi or IRGC do, lower bond yields in the US which is the measurement of real rates, will signal the impending collapse of oil prices in all cases.
69% decline an oil in five months at the end of 1985
77% decline in oil prices in seven months in 2008
This conjuncture will be no different oil cannot stay about $50 war or no war.
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