Recently, many fans and friends have asked me, 'What is the logic behind the recent surge in gold prices?'? ' Today, gold has surpassed $3600 per ounce, and mainland China has also surpassed $1000 per gram in one fell swoop In addition, our community members also consulted a very interesting question: 'Isn't it said that we have entered the cycle of interest rate cuts?'? Why did the 30-year treasury bond bond yield soar and the price fall all the way? ’(such as Figure, the recent consistency of the US, Japan, Britain, Germany and other countries, the yield of 30-year treasury bond bonds jumped) In fact, these two issues are essentially the same problem, essentially the same. Today, I will break them down and talk about: one ️⃣ The logic of long-term funds has changed The essence of long-term treasury bond is that you can lend money to the government for 30 years at interest. The core logic that determines its price is: future inflation level+central bank's attitude+government's fiscal credit. In the past decade or so, with low inflation, unlimited support from the central bank, and relatively stable finances, everyone dared to buy long-term bonds. At that time, buying 30-year treasury bond was stable, fragrant and reliable. But now, all three support points have collapsed: ❌ Inflation cannot be suppressed, and oil prices and wages are both pushing up. ❌ The central bank itself is hesitating and cannot continue to print money indefinitely as a backup. ❌ Governments are borrowing and spending more and more heavily, and the supply of treasury bond has exploded. People who buy bonds start to doubt: can this thing really be worth so much, can it really be stable for 30 years? two ️⃣ Why is the yield skyrocketing? Yield is the reflection of price. If no one dares to take the market, the price will fall and the yield will naturally soar. Just like the UK, the yield of 30-year treasury bond hit 5.68%, the highest since 1998. On the Japanese side, it's even more exaggerated. In the past, countries with zero interest rates now have a 30-year yield exceeding 3.2%, setting a historical record. This is essentially a market player roaring: I want higher interest rates to make up for greater risks in the future! three ️⃣ Interest rate cut ≠ bond bull The previous experience is that as long as the central bank cuts interest rates, a bull market in the bond market will follow. But this time is different. Because the background of interest rate cuts is not simply economic weakness, but high inflation and high debt. Even if the central bank cuts interest rates, the market does not believe it can persist because the government needs to constantly issue bonds for financing, where does the money come from? No one has a bottom line, so interest rates can only be raised to lure buyers back. four ️⃣ Political uncertainty has become an accelerator The vote of no confidence in France, the instability of the ruling party in Japan, and the heated debate over internal fiscal spending in the United States have all turned into "risk premiums" added to long-term bonds. Previously, when buying long-term bonds from the United States, the United Kingdom, and Japan, people thought it was a risk-free rate; I dare not think like that now. The anchors of sovereign credit are being pulled out one by one. five ️⃣ Why did gold and silver rise (also positive for BTC)? It's simple: when the "risk-free" label of long-term bonds falls off, investors look for a new "anchor". Gold and silver are natural substitutes that do not rely on government credit and are recognized globally. The bond market is collapsing, and precious metals have become a safe haven for funds, which is also beneficial for cryptocurrencies such as BTC. Therefore, in general, the current 30-year treasury bond bond yield is soaring, which is essentially the market re pricing the future: ·Accept a higher and more sustainable interest rate environment; ·Accept that the government is no longer a 'prudent borrower'; ·Accept that the central bank can no longer be a perpetual acquirer. That's why the logic of 'interest rate cuts=bond bulls' has failed. The market needs a new equilibrium point, and this process is very painful. So in my opinion, the current 30-year long-term bonds are in a stage where prices are squeezing water and yields are finding anchors. Don't fantasize about a violent rebound in the short term. Long term funds need to continue to be revalued. Embracing safe haven assets may be the right choice!