The debasement trade is back. That's what happens when Treasury Secretary Scott Bessent does something with bonds and people remember gold exists. Also crypto. Can't forget crypto. The metal that's been around for five thousand years and the fake internet money that's been around for fifteen are suddenly hot again because the U.S. government spends too much money.
This is breaking news if you've been in a coma since 1971.
Bessent made a bond maneuver. That's the entire story. A maneuver. Could be anything. Could be waving his hands over a Bloomberg terminal. Could be signing a piece of paper. Doesn't matter. What matters is retail traders now believe the dollar is being debased and they need to rotate into hard assets immediately or die poor.
They will die poor anyway.
The debasement trade has a name because it keeps coming back like herpes. Government spending goes up. Deficit gets scary. Someone in finance says the word debasement on CNBC. Every guy who owns half a Bitcoin and three shares of a gold mining ETF starts texting his friends about the collapse of fiat currency. Then the trade works for six weeks. Then it doesn't. Then everyone forgets until the next time someone named Bessent does a maneuver.
Gold bugs are thrilled. Crypto bros are thrilled. They agree on nothing except that this time the system is definitely breaking and they will be proven right. They've been proven right zero times in recorded history but that number could change any day now.
The concern is over the size and cost of U.S. government spending. The concern is always over the size and cost of U.S. government spending. It's been the concern since Alexander Hamilton invented debt. The spending never stops. The dollar never collapses. The debasement trade returns every eighteen months like clockwork so financial journalists have something to write about between rate cuts.
Bessent's maneuver saved you from nothing.
Photo by Kanchanara on Unsplash
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