Thoughtful Money with Adam Taggart A Tipping Point? US Treasurys Are No Longer The 'Reserve Asset Of Choice' | David Hay
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Oct 2, 2025 David Hay, an experienced macro investor and co-founder of Evergreen, shares his insights on the shifting landscape of investments. He discusses the decline of US Treasuries as the reserve asset of choice and the growing inclination of central banks towards gold. Highlighting the risks of capital flight and the implications of rising deficits, Hay offers a cautious market outlook. He also touches on the impacts of a weakening dollar, growing consumer delinquencies, and the bubbling AI market, stressing the importance of gradual de-risking in investment strategies.
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Stablecoins Could Repatriate Eurodollars
- Stablecoins are emerging as a potential plumbing channel to repatriate eurodollar capital into U.S. treasuries.
- Hay suggests the Treasury may favor stablecoins to improve domestic control of dollar assets.
Don't Trust Stablecoin Reserves Without Audits
- Treat large un-audited stablecoin issuers as risky despite their balance-sheet claims.
- Avoid assuming Tether-like firms are safe until third-party audits verify holdings.
Inflation Shows Conflicting Signals
- Inflation readings show divergent components, creating wide disagreement on trajectory.
- Hay notes official CPI (~3%) may understate real inflation and that rent lags complicate interpretation.