TLDR = USD will remain safe, but not for everyone. And what price safety in a (true) crisis? Like asking where’s your bid in a bankruptcy. One dollar beats no dollar. Overpay 50% for safety, you still have half when the dust settles. Better than zero …

Add policy, political, insto risk = obvs (deliberate) USD-, commodities+.

Markets often slow to recognise major regime shifts, price tail risk. Understandable given uncertain outcome. But if you are waiting for the shift to be obvious to everyone, then by definition you will miss the repricing.

Bessent is a lot of things but he ain’t stupid. Odds-on fiscal crisis inside the next decade given the above.

Hyperinflation, no. That’s for the losing side should war eventuate. But imo >50% chance YCC / outright monetisation inside that timeframe absent sig policy shift. That or AOC 28, taxes+.

Deficit countries always depend on the kindness of strangers. US obvs privileged position but over time has led to endemic overconsumption, underinvestment.

This (and prev) administrations clearly trying to reverse that via tariffs, three pencils-two dolls jawboning, infra spend etc.

Add global infra investment + supply chain onshoring to offset de-globalisation, reduce key eco dependencies.

Then imagine recession, AI / JGB funding crisis, cap controls or god forbid actual war.

In a normal world your logic holds. But I think very apparent we are far from normal here.

Might be a worthwhile exercise to model what happens to international capital flows if every country spends (on average) 3,4,5,6% of GDP on defence for a decade. There may or may not be conflict but zero doubt everyone has to prep for it.

I’d mark that assertion as correct, at least for leveraged spec traders (who do have the ability to move markets short-term).

Hassett v Warsh for Fed Chair a key driver for USD, US bond markets, GC, BTC atm (the debasement trade), direct reflection of T’s power over the Fed. Of real significance.

… and let the incoming Chair know that he’d better watch his step (with an outside chance Warsh balks and resets the table).

Powell feels freer to speak knowing others have his back, deserves plaudits for taking incoming arrows but imo he’s not exactly Joan of Arc here.

Reading btw the lines I think T was just (privately) told the Senate would be confirming Warsh not Hassett so let’s not embarrass anyone unnecessarily here, thank you very much.

This is one-third tantrum, one-third theatre, one-third attempt to (re)establish dominance …

The missing ingredient that solves for your goon shortfall is an unemployment spike following economic calamity and / or military draft following geopolitical escalation. Not inevitable but given *waves hands despairingly* all this seems too thin a reed to have absolute confidence in the outcome.

Another explanation is they stole the last one and got away clean. Some earned arrogance they can take the next.

At the time it sounded off-key; with the benefit of hindsight I read that as a veiled threat. Bolton knew what was coming. If there’s a scoop on the President’s health in coming weeks, I don’t think unrelated.

Bolton said something on CNN following the Putin Summit that caught my attention - “And I will say one other thing. I thought [he] looked very tired up there. I mean, very tired,” he continued. “Not disappointed, tired. And we’ll have to reflect on what that means.”

And on reflection (6) if a copy ever does surface, via whatever source, JG is gonna cop the blame. He’s out doing press now I suspect aiming not just to profile the magazine, but to record his side of the story for the public record as insurance against later exposure.

(4) If JG kept copies or showed the messages to anyone else, let alone actually publishing them, he will spend a very long time reading poorly-translated Solzhenitsyn in a faraway Federal pen;
(5) Hegseth may end up gone anyway, but that will be because he is no good and this story is useful cover.

After removing himself from the chat, JG has nothing other than memory to fall back on, and that will not be enough -
(1) The relevant messages were sent March 15th;
(2) They were set to self-delete after one week (ie March 22nd);
(3) The Atlantic did not publish the story until March 24th;

They can say there were no such messages because at the time the words were spoken, the messages no longer exist, and there is no way to (incontrovertibly) prove they ever did … unless Russia leaked their grabs from Witkoff’s phone, useful kompromat I spose over oh just the entire Principal’s SG.

The outcome here might not be underbus consequences for principals; it might be the threat of supermax prison for Jeffrey Goldberg. If they follow through hard enough we’ll end up wondering if this was in fact an accident.

Do not do this. They’ll bar the doors and watch in delight as Dems flail about trying to escape. Trump will then have a field day. This is a near-perfect distillation of the current situation really. Better to fill the hall with 200 wounded Ukrainians and have them watch in silence.