Excellent point on the USD losing strength vs the Euro while remaining strong on a trade-weighted basis.
I recently went on a family cruise from Boston to Quebec, and we really enjoyed Canada. Not only was the food fantastic, but the cities were clean and the dollar was very strong. I could suddenly see why the narratives persist about Canadians not visiting the US, because the CAD was only $0.70. No one discussed politics on the trip, which was also refreshing. We’re actually planning to go to Montreal over Thanksgiving this year to take advantage of the 4 day weekend.
I haven’t seen anything from Hugh Hendry recently, but last I saw he has been on your side, meaning disinflation/deflation and bullish on treasuries. I lean that way as well with the old bonds/bullion barbell idea, but I’m slowly shifting my gold & uranium mining gains into TLT.
The Treasury's TIC data for June 2025 showed record US treasury ownership in buying with another large increase following an even bigger splurge during May.
➡️Any narrative about ditching the dollar and treasuries has been blown out of the water.⬅️
Net selling of treasuries can often correspond to eurodollar scarcity, such as back in November and December of last year through this past January, as well as this past April, and was reflected in "strength" of the dollar, as mainstream commentary likes to say, with their frequent referencing of DXY as Mike pointed out.
Those eurodollar spasms suggested insufficient collateral circulation in repo markets and consequently dealer banks mobilized those treasury assets for their customers, such as foreign official institutions (not so much for April) and shadow banks (especially for April), based on the TIC data.
For decades we have been subjected to this off-and-on dollar doomism and "Too many treasuries!" nonsense, and unfortunately I doubt this latest episode will be the last one.
"Freedom comes from accepting imperfection and redirecting that energy into deeper, lasting work." - hell yes. Always enjoy your writing and what I can learn from it. Apologies for the BTC-only response, but you encouraged watching ;).
Inconceivable: a kid in 2050 will make a vlog on Nostr and get zapped Bitcoin by their peers.
Not everyone gave up on Bitcoin as a P2P payment mechanism. Usage is actually growing fast... you can't measure this directly because of Lightning's design. The financial engineering and speculation on top of whatever signal is lying underneath will eventually get wrecked. Bitcoin is consistently good for that... that much we agree on.
But the supply cap (while overemphasized) is not the whole story. You've glossed over long-term mining mechanics with your current elasticity observations, dismissing the potential of miners to be the new FORCED re-hypothecators of capital simply because block space demand is currently low.
I can't say it won't create some unjust kings along the way, but I'd love to understand how you think it's purely deflationary long term when there is a coded mechanism that consistently forces Bitcoin back into the market.
Is the current price justified? Who knows, man. You think the security budget completely fails at some point as it goes through these boom-bust cycles, while some people think the hydra lives on until it's run its course and transmuted itself into the heart and veins of a new financial system. People seem to be betting on chaos and against the current system. Can you blame them given the dynamics of passive?
The hydra's world might not be infinitely deflationary but instead have debt priced at EMERGENT interest rates according to the dynamics of the new infinite game: "Who is the most efficient energy re-hypothecator?"
I know... inconceivable. But I'd love to hear why beyond current elasticity/ETF observations (duh) and the not-so-sure bet of a long-term deflationary BTC system.
... and again would love to see you on Nostr, where intentionality is the only way you get to have fun. But nobody can take the fun away from you once you've got it). Appreciate you.
Appreciate your work on Bitcoin, the linked video filled in a couple holes in my thinking about the asset. The more I read about it the less interesting I find it. The last two weeks has seen a sudden surge in people calling MSTR a Ponzi, makes me ask the question that you always raise which is why are you reading this now?
It seems that Saylor has now turned his attention to potential S&P inclusion as sort of his last ditch effort to keep his bitcoin hodl approach alive. Would the increased passive flows be enough to help maintain a healthy premium over a sufficiently long period of time? Immediately it would be a win for Saylor who most likely would flood the market with shares to be bought by passive but this is looking more and more like a rowboat taking on water with Saylor bailing out water as fast as possible to keep the ship afloat rather than the infinite money glitch that supporters love to think it is.
Great post. Reminds me a bit of Sam Harris thoughts on Twitter I wonder if you've ever read/listened to any of that. Would be up your ally.
Wonder what your thoughts are Mike on Bond ETFs like TLT or EDV. I'm mostly interested in their resale value if we get a volmageddom scare for the s&p. Also, if that scenario does come to pass do you think it will negatively impact gld as well?
Excellent point on the USD losing strength vs the Euro while remaining strong on a trade-weighted basis.
I recently went on a family cruise from Boston to Quebec, and we really enjoyed Canada. Not only was the food fantastic, but the cities were clean and the dollar was very strong. I could suddenly see why the narratives persist about Canadians not visiting the US, because the CAD was only $0.70. No one discussed politics on the trip, which was also refreshing. We’re actually planning to go to Montreal over Thanksgiving this year to take advantage of the 4 day weekend.
I haven’t seen anything from Hugh Hendry recently, but last I saw he has been on your side, meaning disinflation/deflation and bullish on treasuries. I lean that way as well with the old bonds/bullion barbell idea, but I’m slowly shifting my gold & uranium mining gains into TLT.
Another excellent post Michael! Here’s hoping it moves the broader audience on X to adopt a less Mad Max more Jason Bourne approach
The Treasury's TIC data for June 2025 showed record US treasury ownership in buying with another large increase following an even bigger splurge during May.
➡️Any narrative about ditching the dollar and treasuries has been blown out of the water.⬅️
Net selling of treasuries can often correspond to eurodollar scarcity, such as back in November and December of last year through this past January, as well as this past April, and was reflected in "strength" of the dollar, as mainstream commentary likes to say, with their frequent referencing of DXY as Mike pointed out.
Those eurodollar spasms suggested insufficient collateral circulation in repo markets and consequently dealer banks mobilized those treasury assets for their customers, such as foreign official institutions (not so much for April) and shadow banks (especially for April), based on the TIC data.
For decades we have been subjected to this off-and-on dollar doomism and "Too many treasuries!" nonsense, and unfortunately I doubt this latest episode will be the last one.
Good timing! I was starting to feel pressure to sell my 2+ percent real yield TIPS!
yeah, whatever you think about tariff rollout and enjoy cute militarist penguin clips, it clearly has worked - everyone got intimidated.
If 10y goes to 6% and Fed launches QE to buy 10Y and 30Y T-Bond ....then we are another Japan at point.
Whats happens to Dollar then? Do countries still have same level of confidence, especially with an erratic President?
"Freedom comes from accepting imperfection and redirecting that energy into deeper, lasting work." - hell yes. Always enjoy your writing and what I can learn from it. Apologies for the BTC-only response, but you encouraged watching ;).
Inconceivable: a kid in 2050 will make a vlog on Nostr and get zapped Bitcoin by their peers.
Not everyone gave up on Bitcoin as a P2P payment mechanism. Usage is actually growing fast... you can't measure this directly because of Lightning's design. The financial engineering and speculation on top of whatever signal is lying underneath will eventually get wrecked. Bitcoin is consistently good for that... that much we agree on.
But the supply cap (while overemphasized) is not the whole story. You've glossed over long-term mining mechanics with your current elasticity observations, dismissing the potential of miners to be the new FORCED re-hypothecators of capital simply because block space demand is currently low.
I can't say it won't create some unjust kings along the way, but I'd love to understand how you think it's purely deflationary long term when there is a coded mechanism that consistently forces Bitcoin back into the market.
Is the current price justified? Who knows, man. You think the security budget completely fails at some point as it goes through these boom-bust cycles, while some people think the hydra lives on until it's run its course and transmuted itself into the heart and veins of a new financial system. People seem to be betting on chaos and against the current system. Can you blame them given the dynamics of passive?
The hydra's world might not be infinitely deflationary but instead have debt priced at EMERGENT interest rates according to the dynamics of the new infinite game: "Who is the most efficient energy re-hypothecator?"
I know... inconceivable. But I'd love to hear why beyond current elasticity/ETF observations (duh) and the not-so-sure bet of a long-term deflationary BTC system.
... and again would love to see you on Nostr, where intentionality is the only way you get to have fun. But nobody can take the fun away from you once you've got it). Appreciate you.
Appreciate your work on Bitcoin, the linked video filled in a couple holes in my thinking about the asset. The more I read about it the less interesting I find it. The last two weeks has seen a sudden surge in people calling MSTR a Ponzi, makes me ask the question that you always raise which is why are you reading this now?
It seems that Saylor has now turned his attention to potential S&P inclusion as sort of his last ditch effort to keep his bitcoin hodl approach alive. Would the increased passive flows be enough to help maintain a healthy premium over a sufficiently long period of time? Immediately it would be a win for Saylor who most likely would flood the market with shares to be bought by passive but this is looking more and more like a rowboat taking on water with Saylor bailing out water as fast as possible to keep the ship afloat rather than the infinite money glitch that supporters love to think it is.
Another thoughtful, insightful analysis. Thank you, Michael, for sharing your perspective.
Please pause the China decision at the end of each piece. Just for a goof.
Great post. Reminds me a bit of Sam Harris thoughts on Twitter I wonder if you've ever read/listened to any of that. Would be up your ally.
Wonder what your thoughts are Mike on Bond ETFs like TLT or EDV. I'm mostly interested in their resale value if we get a volmageddom scare for the s&p. Also, if that scenario does come to pass do you think it will negatively impact gld as well?
When Trump gets his own FOMC next year and sets Fed Funds at 1% ...
Great one 👌🏻