Trump & his "Virtuous Circle"

The battle between the pro and anti-Trump forces rages in the Treasury market: culling the market of buyers (China, increasingly Japan, and from various asset managers) creates a bid for various safe havens, which include gold and bitcoin.

Question: Why Haven't Treasuries Already Crashed?

The US economy fumbles-along, deficits continue to stretch, wars grow, yet the yield curve remains suspiciously intact - how does this work?

Simple: the Trump admin captured safe havens

The Art of Financial Repression

Trump Admin desperately needs more financial repression: currently, risk premium in US bonds exceeds that of erstwhile PIIGS:

Greece

USA

Portugal, Spain, and Italy likewise yield significantly less than their comparable term US Treasury.

The problem with "Financial Repression", though, comes from the markets: they will see it and test it - with catastrophic results for any administration attempting to pull another "devaluation stunt".

No, instead, the Trump admin will bring all safe-havens under the US asset umbrella, rather than coerce capital into the US: by incorporating safe-haven assets onto America's balance sheet, the "capital flight" trade from US Treasuries just... gets recycled into more capital for US Treasuries.

Trump's Virtuous Circle

Through pulling the core safe-haven assets - precious metals and crypto - onto America's "balance sheet", the Trump administration turns any and all panics away from American capital markets into... capital gains within the US economic system.

Aside from austerity and improving balance-of-payments, arrogating safe-haven assets through domestic(mainly banking) and foreign policy changes protects the Trump admin from not only panics against US Treasuries, but even more considered pivots against the US by dint of supply chain constraints (e.g. various minerals or infrastructure).

Commodity-Backed Stablecoins - "Head of the Inflation Snake"

We already know about USD stablecoins and their positive impact to help "twist" the yield curve under the GENIUS Act (https://strifeandjustice.com/cryptocurrencies-quantum-safe-protocols/), but more work remains to make, as Trump declaimed, "the United States the crypto capital of the world": establishing commodity-backed stablecoins.

Which commodity would be backed by these deep, liquid stablecoin contracts? Why, of course, all the inputs of the US economy and covariates with the US dollar!

Commodity-Backed Stablecoins... Financing US Treasuries

Any strong moves against the US dollar entails a push into commodities, at some point: thus, the commodity-backed, US-based stablecoins become, invariably, significantly over-reserved and invest their surplus, under the likely policy, into US Treasury bills.

Powell, Stablecoin, & Rates

The issue with rates comes from stablecoin adoption, and Jerome Powell drags his feet on the issue - from Powell's resistance to stablecoins and back-door lobbying against them comes Trumps wrath and consequential demands for his resignation.

Indeed, when the last holdouts against stablecoins come to terms with the Trump administration, rates in the long end indeed come down - rate cuts or not.

Rate-cuts Will Lag Stablecoins

Eventually, the Fed will cut rates. but only long after stablecoin inflows have synthesized a significant bid for Treasury bills and captured any attempt to "escape" the US capital markets.

Defensive Policy - Chinese Farmland Purchase Ban - Prevent Adversarial Food Price Shocks

Anything "Chinese" is really a powerful Westerner or Western institution collaborating with a Xi-aligned intermediary, acting merely as custodian and broker.

By the way, why does anyone care if Chinese capital returns to the US through farmland purchases? Well, if one reads the bill, it also entails infrastructure for the processing of agricultural commodities, in addition to raw agricultural land.

Thus, imagine, for example, that anti-Trump semi-trillionaire with deep Xi-ties, decides to shock the US economy with a food price surge: he could, through various intermediaries in China, acquire agricultural assets across the stream, and with adversarial actions against planting, harvesting, and processing of grains, constrain supply and significantly hurt the purchasing power of Americans.

Tariffs & Chinese, Rogue "Anti-Trump" Capital

Until the global(many of which prove American!) "anti-Trump" forces make a peace deal with the Trump administration, they remain a menace through their Xi-aligned organs. By front-running the "anti-Trump" American outflows, the Trump administration significantly decreases the leverage against his administration.

Front-running safe-haven trades isn't enough, though: tariffs remain the preferred tool to coerce Xi-aligned players towards the Trump administration policy. For example, the Burmese tariffs seek to "break" Xi's bosses who depend on steady and cheap supplies of Burmese tin - Indonesia does NOT export raw tin, as a matter of policy, and global tin prices prove ruinous for Chinese industrialists.

Other policy tools include things such as unilateral revocation of UNCLOS, to open-up significant subsea mineral resources to the US and her allies, and a renewed global carbon tax treaty (yes, Trump WILL impose a carbon tax on Americans).

Foreign Policy is Domestic Policy

With foreign governments acting as conduits for Trump adversaries and allies alike, all foreign conflicts directly manifest as concrete, military opposition to Trump's administration. Victory in Gaza and Iran, for example, result in concrete blows against Trump's adversaries around the world, including his opposition within the United States.

Trump's Virtuous Circle: Stop Bleeding FX and Divide & Conquer Opposition

Through Trump's "virtuous circle" to front-run safe-haven and inflation trades, combined with an aggressive tariff and military policy to divide and conquer foreign proxies for the anti-Trump global front, Trump can eventually deliver Americans what they need: low interest rates and low inflation.