The 5-Year Treasury Just Broke 5%... The Whole Curve Is Next

Record Diesel Prices and SPR Concerns [0:00]

• Diesel prices have reached an all-time high, exceeding $6.50 per gallon nationally and $10 in California.
• Concerns are mounting about the depletion of the Strategic Petroleum Reserve (SPR) and its impact on future price spikes and emergency preparedness.

  "we got to be getting close to a point where we can't tap into the strategic petroleum reserve anymore and then prices are really going to skyrocket"

Trump's Alleged Fed Conversation [1:20]

• Donald Trump is accused of telling Federal Reserve official Kevin Warsh to vote with the board on interest rate hikes.
• This alleged conversation, if true, implies significant presidential interference in Fed policy.
• The media's lack of strong reaction to this claim is highlighted as a major oversight.

  "I told Kevin that he might as well vote with the board because it's not going to make a difference"

Warsh's Response and Media Scrutiny [3:00]

• Kevin Warsh declined to comment on conversations with the President during a press conference.
• The speaker argues that Warsh must clarify whether Trump's claims are true or false.
• If true, it suggests the Fed chairman takes marching orders from the President.

  "I'm not going to answer those questions I'm not going to talk about the president or our conversations"

Rising Treasury Yields [4:45]

• The five-year US Treasury auction yielded 5.03%, the highest in over 20 years.
• All maturities reached new highs, with the 30-year bond at a 22-year high and the 10-year at a 19-year high.
• The yield curve has flattened, leading to a potential trade of shorting the 30-year and buying the 10-year.

  "the five-year u.s treasury which went out at auction at 5.03 so above five percent"

Future Yield Projections [6:00]

• The two-year Treasury is nearing 5%, with projections that the entire yield curve could have a "five handle" or higher by next year.
• Mortgage rates are already above 7% and rising.
• A 5% interest rate on the national debt could result in $2 trillion in annual interest payments.

  "by next year the entire yield curve from three months out to 30 years could have a five handle or higher"

Economic Impact of Rising Debt Costs [7:00]

• Paying 5% on a $40 trillion national debt would make interest payments the largest budget item, exceeding Social Security.
• This scenario represents a "disaster waiting to happen" due to compounding debt and rising interest rates.
• Rising rates will exert downward pressure on the economy and undermine tax revenue.

  "that is a disaster waiting to happen and the worst news is it's not going to stop there"

Market Disbelief and Historical Comparisons [8:15]

• Stock market investors are reportedly in disbelief about rising yields, assuming they are near the top.
• Historical comparisons to the early 2000s are dismissed due to the subsequent 2008 financial crisis and the current bear market in bonds.
• The current situation is fundamentally different due to significantly higher debt levels and a rising yield environment.

  "at some point they're going to have to capitulate not only to the fact that rates aren't going down but that they're going to keep going up"

McDonald's CEO on Inflation [10:00]

• The CEO of McDonald's predicts that high inflation will persist for "many more years."
• This statement directly contradicts the Federal Reserve's projections of inflation returning to 2% within two years.
• McDonald's, serving cost-conscious customers, faces significant pressure to keep prices down.

  "inflation is going to be with us unfortunately many more years at elevated levels"

Inflation Expectations Disconnect [11:00]

• The McDonald's CEO's outlook on inflation clashes with Federal Reserve statements, particularly those of Kevin Warsh.
• Warsh claims inflation expectations remain "well anchored at two percent," a view not shared by those on the front lines of business.
• The speaker suggests the Fed's projection is wishful thinking based on their mandate.

  "well they're not anchored at two percent at mcdonald's the guys running mcdonald's don't think inflation is going to come back down to two percent"

Economic Growth vs. Inflation Debate [12:30]

• The idea that economic growth under Trump is causing inflation is refuted.
• The speaker agrees with Kevin Warsh that economic growth does not cause inflation.
• Rising bond yields are attributed to existing inflation, not future growth.

  "the reason that bond yields are rising it's not because the fed believes that the economic growth is going to create inflation it's because the fed believes that the inflation is already here"

Diesel Export Ban Contemplation [13:30]

• There was talk of banning diesel exports to address domestic shortages, a move the speaker believes would backfire.
• Banning exports could lead to reduced production and even higher domestic prices.
• This interference in the market is seen as a mistake, similar to the SPR releases.

  "whenever the government does that it generally backfires"

SPR Abuse and Market Rationing [14:30]

• The SPR has been used for political purposes, not genuine emergencies, leading to its depletion.
• The speaker advocates for allowing prices to rise naturally to ration energy consumption.
• Artificially suppressing prices prevents demand adjustment, leading to greater price shocks later.

  "the market will ration the energy to its highest and best use"

Trump's Media Bans and Censorship Concerns [17:00]

• Donald Trump banned MSNBC, CNN, and Politico from White House press briefings, citing "fake news."
• This action is criticized as censorship and setting a dangerous precedent.
• The media's role is to criticize the president, and leaders should withstand criticism.

  "it's not up to donald trump to make that decision because he's basically saying i don't like how they're reporting the news"

Truth Social Lawsuit and Insider Trading Allegations [20:00]

• Trump's company, Truth Social, is being sued for allegedly selling early access to his posts as insider information.
• The lawsuit claims this practice is unethical and illegal, profiting from the presidency.
• The speaker argues this is not standard industry practice and exploits the president's market-moving influence.

  "you can pay like a 50 to 100 thousand a month and you will get the post a few seconds or milliseconds before everybody else"

Republican Hypocrisy and Party Damage [22:30]

• Republicans are criticized for not calling out Trump's actions, making them hypocrites and undermining the party.
• The speaker predicts significant Republican losses in upcoming elections due to the economy and Trump's actions.
• Trump's denial of the economic situation and blaming Biden is seen as a failing strategy.

  "they are defending what really is the undefendable when it comes to what trump has been doing and what his administration has been doing for personal profit"

Panama as a "Plan B" Destination [25:00]

• A conference in Panama City attracted attendees seeking a "Plan B" due to potential instability in their home countries.
• Panama is seen as a desirable location for its infrastructure, lifestyle, and tax advantages, particularly for foreign earnings.
• The country is attracting individuals seeking economic freedom and opportunity, not welfare.

  "everybody is looking for a plan b you know there are a lot of canadians up there you'd be surprised at how many canadians want to get the hell out of canada"

Historical Immigration and Welfare State [28:00]

• The speaker contrasts historical immigration, where newcomers had no government support, with the current welfare state.
• The lack of a welfare state in the past fostered individual responsibility and economic growth.
• Dismantling the welfare state is presented as key to attracting talent and revitalizing the economy.

  "you came in to america and you got no help from the government you just you were here and you were on your own"

Exodus and Financial Preparedness [32:00]

• The US is losing its status as a top destination for talent due to its welfare state, with people opting for countries like Panama.
• The speaker advises getting financial affairs in order and preparing a "Plan B" due to potential economic crises, especially after the 2028 election.
• Personal financial planning includes portfolio diversification and securing gold and silver.

  "my my plan b starts with my portfolio before my i'm physically leaving the country my my investments are leaving the country"

Wedding Anniversary [34:00]

• The speaker mentions having dinner plans for their 14th wedding anniversary.

  "i got dinner plans tonight is uh my 14th wedding anniversary"