They’ve LOST CONTROL of the BOND market, OIL, and YEN

Treasury Secretary Scott Bessent's announcement that Treasury buybacks would at least double initially pushed yields lower, but the move was later erased, which Shin viewed as an unsuccessful test. The planned bill-funded Operation Twist could provide short-term control by shifting issuance toward bills and using the proceeds to buy longer-term bonds, while postponing the broader debt problem.

Shin argues that the Federal Reserve can directly influence short-term rates but cannot control the 10-year yield, which is more closely tied to mortgages and other borrowing costs. He identifies 2026 as a major refinancing risk because a large amount of Treasury debt will mature and may need to be rolled into a higher-rate market with weaker demand.

The debt burden is becoming increasingly difficult to sustain, with roughly $40 trillion of debt, more than $100 trillion in unfunded liabilities, and net interest costs projected to exceed $1 trillion this year and reach $2 trillion in 2036. Shin says interest payments have already surpassed defense and Medicaid spending and could overtake Medicare in 2029, crowding out other fiscal priorities.

Shin argues that attempting to grow out of the debt burden effectively amounts to printing money and that policymakers are more likely to monetize debt than cut spending or raise taxes. He connects this concern with rising rates across the G7 and other developed economies following the COVID-era expansion of the money supply.

Shin interprets declining foreign official Treasury holdings in Federal Reserve custody and gold's growing share of central-bank reserves as signs of weakening confidence in U.S. Treasuries and the dollar-centered financial system. He also links the shift to erratic U.S. policies and interventions, while viewing gold's technical breakout as bullish confirmation.