E114 - The Treasury Just Told You Exactly What It's Going to Do…

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In 1933, a Harvard-trained lawyer walked into Chase National Bank with signed receipts for twenty-seven numbered bars of gold and was told he could not have them. Two days after he sued, a federal grand jury indicted him. He never got the gold back. Hans opens with an update on Brian, who may be home temporarily in September or October but likely stays on active duty orders, then turns to the Treasury's announcement that it is doubling its long end buyback operations from two billion to four billion. The dollar figure is a rounding error against forty trillion in debt. The signal is not, and it is the same move Scott Bessent spent the last two years criticizing Janet Yellen for making.

Chapters

00:00 – Opening segment

02:20 – No end in sight and why nobody negotiates with America anymore

06:35 – Reading the macro tape without becoming a permabear

07:55 – The Treasury doubles its long end buybacks

09:15 – The economic equivalent of no new foreign wars

11:50 – Where Hans actually sits on the political spectrum

13:10 – Two billion to four billion: the substance of the move

14:05 – Bills, notes, and bonds, and why the distinction matters here

16:35 – Off-the-run long bonds and a disorderly long end

17:35 – What they are buying and what is paying for it

19:00 – One leg of QE, not the money printing leg

20:15 – Yellen's trillion dollar mistake and the two percent mortgage analogy

22:40 – Bessent criticized this exact move, then made it

23:55 – Yield curve control and how far away it actually is

24:25 – Intervening into a record high market with no visible fever

26:00 – The debasement trade and the stock market as pressure release valve

28:30 – The yen intervention and why Japan matters

29:15 – The repo facility and keeping Treasuries out of foreign hands

32:20 – What all three moves have in common

33:30 – Hormuz closed, oil creeping, and an empty petroleum reserve

36:45 – Japan as the roadmap for where this road ends

37:50 – Homeschooling, wristbands, and the safe and inclusive playground

43:35 – Frederick Barber Campbell walks into Chase National Bank

46:05 – The lawsuit, the indictment, and the demurrer

49:50 – When a dollar was a bearer claim on gold

51:55 – Benjamin Strong, the Bank of England, and the boom that had to bust

53:10 – How the Fed was sold to America in 1913

55:50 – Nine thousand banks fail and the money supply drops a third

58:50 – The Fed as an instrument of extraction

01:00:35 – Where America sits in the line, and the prison hierarchy analogy

01:03:50 – Hamilton, specie, and the principle of productive credit

01:06:05 – The bank holiday and the Emergency Banking Act

01:07:45 – Five words added to the Trading with the Enemy Act

01:10:20 – Executive Order 6102 defines hoarding as owning

01:16:20 – The markup from twenty dollars to thirty-five

01:17:35 – The Gold Reserve Act and the Exchange Stabilization Fund

01:18:35 – Marriner Eccles and the fight over the lever of power

01:21:25 – Carter Glass fights the bill he made possible

01:22:30 – The FOMC is created and open market operations take over

01:24:45 – Killing the regional discount rate and the governor it provided

01:27:30 – Half a Keynesian equation with no brakes on the other side

Key Takeaways

The size of the buyback is not the story. Doubling from two billion to four billion per operation is meaningless against forty trillion in debt. What matters is that the Treasury told the market, in a public press release, that it will step in and buy the long end when demand thins out.