Watch what the Fed does. – Getty Images
The U.S. Federal Reserve just pulled off something stealthy — over four days last week, without fanfare, the Fed vacuumed up $43.6 billion in U.S. Treasurys. That’s $8.8 billion in long-dated 30-year bonds on May 8 alone, plus another $34.8 billion earlier in the week. Not exactly small change.
Quietly returning to the quantitative-easing trough isn’t standard Fed housekeeping — it’s like a bank robber returning to the scene because he forgot his car keys.
Let’s talk straight: This isn’t tightening. It’s stealth easing. It’s monetary policy on tiptoes. Some traders have begun to notice, and smart investors should too.
Commodity traders, in particular, have a nose for monetary sleight-of-hand. Gold GC00, the ultimate financial cynic’s metal, has risen sharply since early 2024. Gold doesn’t believe in politicians, central bankers or economists — even the Ivy League types who wave their hands and promise stability. It believes numbers.
But this isn’t just a U.S. game. China has jumped into the gold pit too, and brings a bigger shovel. China’s central bank just cranked open the vault doors by dramatically raising gold-import quotas, letting local banks swap U.S. dollars DX00 directly for bullion.
That’s China quietly telling Uncle Sam that holding all those U.S. Treasurys is starting to feel less like prudent investing and more like playing roulette with the house on fire.
Think about it. Even if China converts into gold a modest 10% of the $784 billion Treasury stash it held as of February, it would send tremors through global markets.
China isn’t hoarding gold because it matches the curtains — it’s preparing for a monetary earthquake. Central banks around the world are doing the same. America just imported a mountain of gold. Nations are bracing for the next seismic shift in global monetary power.
Read: U.N. predicts slower global economic growth following Trump’s tariffs and trade tensions
Gold and bitcoin BTCUSD are responding, too — bitcoin because crypto investors distrust central planners; gold because central planners distrust each other. Bitcoin is the back-alley asset that respectable investors pretend they don’t visit. Bitcoin is rising not only due to distrust of central banks and the neat little fiat-currency Ponzi schemes they’ve been running for years — but also because a year ago, bitcoin experienced its latest halving event, pushing it into the typical bullish upswing of a four-year cycle.
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