Rebel Capitalist News Holy Sh*t...The Treasury Has Never Done This Before
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Aug 6, 2025 The Treasury has taken a bold step by issuing $100 billion in four-week bills, raising eyebrows about the potential risks involved. Financial expert Scott Bessent critiques this strategy, shedding light on the implications of increased short-term debt. Meanwhile, gold emerges as a key investment, offering a hedge against inflation and rising storage costs. The discussion highlights innovative ways to invest in gold, including leasing services that can generate interest, showcasing both the benefits and risks of this approach.
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Unprecedented Four-Week Bill Issuance
- The Treasury issued more four-week bills than ever before, a move never done previously.
- Scott Bessent criticized Janet Yellen for this but then did the same after taking her job, indicating complex motives.
Four-Week Bill Yield Below Fed Rate
- The four-week Treasury bill yield dropped below the Fed's reverse repo rate during the Silicon Valley Bank collapse.
- This indicates high demand for pristine collateral despite accepting lower yields than risk-free Fed options.
Collateral Multiplier's Impact on Supply
- Collateral multiplier affects supply as system willingness to rehypothecate treasuries effectively increases available collateral.
- This dynamic explains fluctuations in Treasury interest rates beyond mere issuance supply.