Suddenly, US bond yields are on the rise again. As the chart above shows, the tick back to 4.81% was a normal correction in an uptrend, having found support where one would expect. The investors who were duped last month into buying treasuries by a number of big brokers will be feeling somewhat sick.
Within the debt trap emerging for the US Government and the other G7s lie the seeds of currency destruction. But Keynesian driven markets are simply myopically looking at the surprise rise in bond yields as increasing the cost of gold ownership — hence the markdowns in gold and silver. Traders will have to simply sit through this nonsense until the so-called debasement trade is judged to be back on.
Higher bond yields are required to compensate dollar holders for loss of purchasing power. That loss comes from not just growing government budget deficits, but also from the US’s attacks against Iran, whose shipping remains badly disrupted, as the IMF’s charts of shipping transists and tonnage through the Straits of Hormuz shows:
