⬇️ My Thoughts ⬇️
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Gold is having its “calm before the storm” moment 😄 New all time high is coming very soon to all markets close to you
Of course - context is always needed In 2002 Fed Funds Rate was x3 smaller At that time, rates were higher overall To find rates as small as in 2002, you’d need to go back to the 1960's 😳 For 15 years now, US had effectively been under QE financing - cheap debt 🏦🫧
🤯 The year is 2002… US bond yields are at the same high levels as they were in 2002… That’s 23 years ago In 2002 US national debt was x6 SMALLER than now 5.1% now is not the same as 5.1% before - it’s worse. Much more debt to refinance & pay interest
Who’s ready for a new gold ATH? 🙋 You don’t have to guess - just look at the systemic raising bond yields across all maturities & multiple sovereigns
🇨🇭Not all European bonds are crashing The yields on the 10 year Swiss bond is actually down ≈40% over the past 3 months, although up ≈12% over 6 months
🚨🇺🇸 30Y bond yield is up 132 bp in 1h 30 year US bond is not only trading above 5%, but had its price fall by ≈1.34% in the short span of 60 minutes And you thought crypto & meme coins were volatile 😂
A month ago me and Gemini 2.5 Pro Deep Research had a disagreement 🇯🇵 Gemini said Japan will continue with QT, while I think they will be back to QE soon With Japanese bond yields at ATHs - which one of the scenarios do you find more likely? 😁
🇺🇸 US bond yields are at their ≈2006 levels 🏦 Current FED Funds rate is about the same as it was in '06 💰 The US Dollar Index is significantly higher today than in '06 High volatility in the bond market became a norm. Volatility & risk go hand-in-hand Concerning!
🚀 Updated My Thoughts Section Now, each thought has: 👉 A unique shareable page/link 👉 OpenGraph images with the exact text of the thought So you don’t even need to open the page when reading the thought - it’s in the link's preview Example:
🇷🇺 Russian Bond Yield Curve Is Inverted An inverted yield curve is usually a bad sign (e.g. recession) However, 🇷🇺's fundamentals are healthy Why inverted? 🇷🇺 Central Bank's 21% key interest rate, or rather the expectation of it going down, is what’s pushing this shape
Here's why bond yields skyrocketing worldwide ⬇️ Countries own a lot of US debt (bonds) Moody's downgraded the US credit rating Now, countries are at a higher risk of default, because the US debt they own is now less valuable = higher chance of country's default (simplified)
Btw I've since learned that gold is only ≈10% of total reserves of the Portuguese Central bank - that's low It's 80% of their international reserves - those are basically regulation-defined ratios that banks must maintain (look into BASEL rules if curious)
It's very okay to leverage, as long as you are sufficiently hedging the risk. In practice this means that you are explicitly quantifying & accepting a certain percentage of risk in exchange for a certain return/alpha
Ever since I wrote this about Japan's easing monetary policy - the yields on 🇯🇵 30 year bonds are up more than x2 Japan heavily relies on debt. Today, Japan has to pay 123% more for that debt than they did 2 years ago Solutions: 1️⃣ Default 2️⃣ Inflate Yen Hello inflation 👋
Regarding global skyrocketing bond yields - it depends where you’re looking 😄 Sovereign bond yields up: 🇺🇸🇯🇵🇬🇧🇪🇺 Sovereign bond yields down: 🇷🇺🇨🇳 I’ve been posting numerous explanations for of this - all very expected
30Y US bond yield just crossed 5% 😳 Scraping the ≈5.22% from 2023 👉(Soon) highest yield in >17 years! Last time yields were consistently this high was 2007. But a lot of QE policies came in force after the 2007-2011 crisis, so rates were naturally higher back then
There is also ex-ante Information Ratio, i.e. the expected future IR, based on: 1️⃣ How accurate your forecasts are (IC) 2️⃣ Num independent investments (BR) 3️⃣ How effectively your strategy can be executed(TC) 👉 Allows you to model risk-adjusted prediction of investment returns
Information Ratio is a risk-adjusted measure of how good your portfolio performs against the market average/benchmark 📈 Risk=how much your portfolio return deviates from benchmark 💡IR=1: for every 1% of risk there is 1% return 👉Look for IR>1 🔑 metric in quantitative finance
🤯 Of course temporary, but still - Gold down 3% today Outflows into equities However, some gold-linked currencies like Ruble are up 2.5% Volatility is a measure of risk. Gold volatility is an expression of the baseline systemic risk
It’s a mystery why US bond yields are skyrocketing Higher yield = higher risk, BUT the US has been doing nothing, but irradiating confidence, respect & cooperation 🤯
🇷🇺 Russian Central Bank currently has interest rates at 21% Yet the yield on a 10Y bond is 15.6% I’ve previously written that the market is both, pricing in upcoming low(er) rates & paying a premium to stay in Ruble Today, I found the targets for 2025 & 2026
🇷🇺 Budget deficit financing through the National Reserve Fund instead of bond issuance is one of the reasons why Ruble and the Russian bond yields have been doing so good 🇺🇸 $DXY is up - but not against $RUB 🇷🇺 Fundamentals speak louder than words
