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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Central Banks Are Abandoning Treasuries
- Global central banks are shifting away from U.S. Treasuries as their reserve asset of choice.
- David Hay links this shift to gold's strong rally and global reallocation trends.
De-Risk By Selling Into Rallies
- Gradually sell into the current rally rather than trying to time a single top.
- Accumulate cash methodically to reduce exposure to a highly correlated market downturn.
Domestic Buyers Must Absorb Massive Issuance
- Central bank sales of treasuries coincide with exploding U.S. debt outstanding.
- David Hay warns domestic buyers must absorb roughly $2 trillion of issuance needed to fund deficits.