Why U.S. Treasury’s Bond Market Intervention Is Just The Beginning | Luke Gromen
Спикеры
Luke Gromen
— Основатель, Forest for the Trees
Jack Farley
— Ведущий, Monetary Matters
Luke Gromen argues the US Treasury has an emerging-market hard-currency debt spiral problem, with entitlements, interest, and veterans benefits exceeding 105% of receipts. He expects Treasury buybacks and yen and swap-line interventions to evolve into soft yield curve control and negative real rates, making gold the core winner. Gromen also sees AI capex as a bubble that has not peaked but will eventually bust, while Jack Farley defends near-term semiconductor strength and software-stock value. The conversation also covers USD/JPY carry-trade constraints, a possible US gold revaluation, and bullish industrial metals tied to reshoring.
- Treasury buyback upsizing is framed as soft yield curve control and a response to a US debt spiral.
- The fiscal math shows entitlements, interest, and veterans benefits at 105% of receipts and growing faster than receipts.
- Gold is viewed as the main beneficiary of negative real rates, reserve demand, and a possible Treasury gold revaluation.
- Long-end Treasuries are considered unattractive in real terms even if nominal yields are capped near 4.7-4.8%.
- The AI capex boom is called a bubble that has not yet peaked but should eventually bust, with gold the preferred rotation.
- Industrial metals and Bitcoin are also viewed favorably, while USD/JPY is expected to stay policy-supported and rangebound.
Идеи
Gold outperforms equities over next years.
The war and Treasury containment are positive for stocks in dollar terms but negative for stocks in gold terms. Since early 2022 the S&P 500 total return is down nearly 30% against gold, and since 2000 still down about 50%. Gromen expects gold to continue outperforming equities over the next two to five years.
Liquidity and inflation support US equities.
The Treasury and Fed will not allow a nominal US default and will contain long-end yields through buybacks, yield curve control, and liquidity injections. That supports nominal GDP growth, financing, and inflation, so US equities should be owned in dollar terms and should not be shorted in dollars. He says stocks can go much higher in nominal terms in a revaluation or liquidity-driven scenario.
Debt spiral forces negative real rates, gold.
Gromen lays out a legal/mechanical path for a massive gold revaluation. The Treasury can use the Exchange Stabilization Fund to bid gold aggressively, settle trade deficits in gold, and then instruct the Fed to revalue its gold from $42/oz to $20,000/oz under existing accounting rules. That would deposit about $5 trillion into the Treasury General Account and drive gold dramatically higher while restructuring Treasury debt.
Liquidity injections support Bitcoin long term.
Gromen says he likes Bitcoin long term. He also notes that the liquidity injections and rate cuts needed to manage the dollar/yen carry-trade problem would be good for Bitcoin, and he sees Bitcoin as another beneficiary of the same monetary debasement dynamic, though sovereign concerns about on/off ramps keep his conviction lower than gold.
Dollar-yen rangebound to avoid carry crises.
The US and Japan are trapped between a dollar carry trade and a yen carry trade. If the dollar gets too strong, offshore dollar borrowers are forced to sell assets; if the yen gets too strong, the yen carry trade unwinds. They will therefore manage USD/JPY in a range with rate cuts, liquidity injections, and intervention, making it a policy-supported rangebound setup with occasional crisis risk.
Long-term Treasuries lose real value.
Gromen is bearish on long-term Treasuries on a real basis, though not necessarily nominally because the US government will not default and will pin yields. He notes TLT is already down 90-95% against gold since 2014 and thinks it has another 90-95% to fall against gold, mostly via gold rising. He says stay away from the long end of the curve and own gold instead.
AI bubble eventually busts; take profits.
AI will be revolutionary, but the current AI capex boom is another classic capex bubble. All five prior US capex booms ended in busts. Gromen says the bubble has not peaked yet, so he would not short it here, but investors should take profits and rotate toward gold because once two to three years into prior bubbles, long-term investors did better selling the bubble and buying gold.
AI capex keeps semiconductors rallying.
Jack argues investors should not short semiconductors because AI capex commitments are real and large: Google reportedly has $800 billion in forward purchase commitments, Nvidia could make around $300 billion in operating profits, and private capital is being raised for AI securities. He expects semiconductor and power equipment earnings to reflect this reality and thinks the AI trade goes higher before any bubble peak.
Buy cheap software stocks sold off.
For people who believe AI is a bubble, Jack suggests buying software stocks that have been sold off indiscriminately because the market assumes AI will ruin them. Many trade at only 15-20x earnings, so they are an obvious non-bubble pocket of the stock market with upside if those fears are overdone.
Physical grid buildout drives industrial metals.
The US grid buildout, reshoring, and self-sufficiency push are physical endeavors that cannot be financed with dollar swap lines. Gromen likes silver, copper, iron ore, and steel because building real infrastructure and manufacturing capacity requires these commodities, especially as the US tries to catch China on electricity generation and industrial capacity.
Далее
This Monetary Matters video, published August 20, 2026, features Luke Gromen, Jack Farley discussing Gold vs S&P 500, SPY, GLD, BTC, USD/JPY, TLT, AI/tech stocks, NVDA, SMH, IGV, COPPER, Iron Ore, SLX, SILVER. 10 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Luke Gromen, Jack Farley · Tickers: Gold vs S&P 500, SPY, GLD, BTC, USD/JPY, TLT, AI/tech stocks, NVDA, SMH, IGV, COPPER, Iron Ore, SLX, SILVER