We live in an era of chaotic, bold action.
Are you having fun yet? What a whirl wind. Instead of the Fed stepping in to bailout whoever was blowing up late Tuesday night, Donald Trump came out yesterday announcing that there will be a 90-day grace period on tariffs for the countries who didn't retaliate after the Liberation Day announcement from the Rose Garden on April 2nd. There will be a 10% tariff levied across the board during this 90-day period. An example of Trump getting to where the market ultimately thought he'd get to. China, on the other hand, has had their tariffs raised to 125% and seems to have been isolated from the rest of the world as the United States attempts to re-calibrate the global economic order.
I must admit it is entertaining. Only because, to anyone paying attention, this was all very predictable. Here's what we wrote on April 2nd after the Liberation Day announcement.
I'll reiterate: it is truly mind boggling that people haven't caught on to Trump's negotiation tactics yet. If you haven't internalized these tactics yet, take some time to reflect on the last seven days while reading the second paragraph in the screenshot above. This is the nature of negotiations that include Donald J Trump.
With all of that being said, we're not out of the woods yet. Everything we wrote about yesterday still holds true. Markets are screaming and risk is back on the menu. This is great for those holding assets. However, it also means that multi-trillion dollar deficits driven by unbridled fiscal spending is likely to move full bore ahead. The long end of the yield curve has come down from the levels it reached on Tuesday night, but they are still in a range that makes rolling over trillions of dollars of debt very uncomfortable. And it would be naive to think that the chaotic and bombastic nature of these trade agreements hasn't put a bad taste in the mouths of many outside nations holding our long-term debt.
Also, the nature of the chaotic and bombastic approach to negotiations is such that a Truth Social post could be sent out at any moment that completely reverses everything back to where it was yesterday morning.
With that in mind, I'd like to point to a potential strategic move from the administration that would not shock me; BitBonds.
If you've been paying attention to Scott Bessent's press and event appearances over the last seven days he's been bringing up bitcoin unprovoked. Last week when he appeared on Tucker Carlson's show he mentioned that bitcoin is becoming a store of value and earlier today he brought up the Treasury's intent to make sure that regulations are supportive toward the digital asset industry.
I have to imagine that Secretary Bessent understands that today is potentially a temporary respite from the whipsaw markets have been through since Trump took office less than three months ago. He also understands that it would not be advantageous to roll over trillions of dollars of debt on the long end with yields where they are. And it truly seems like the Trump administration is willing to take bold action in an attempt to reset the global economic playing field in a way that benefits the United States.
With that in mind, the only thing I can think of that can accomplish the goal of bringing long-term interest expenses down while putting forth a bold economic strategy is to begin issuing BitBonds. He'd be able to roll over a portion of the debt at 1% and signal to the rest of the world that the United States is taking bold action to adopt cutting-edge 21st century monetary technology. It would also, obviously, support the price of bitcoin, which seems to be a core KPI that Trump is paying attention to.
As a reminder, BitBonds are framed by Andrew Hohns and Matthew Pines in their Bitcoin Policy Institute paper as a win-win-win. The Treasury gets to roll over debt at lower rates, finds a budget neutral way to build a strategic bitcoin reserve and provides the American public with downside-risk protected exposure to the best savings technology man has ever seen.
Don't be surprised if you see the first BitBonds coming to market this year.
The financial chess match between the US and Europe is heating up as Trump adopts a multi-front strategy against European powers. Tom Luongo revealed that European leaders believe they can simply "wait Trump out" rather than adapting to the new reality. The evidence is in the markets - US-German credit spreads are narrowing, indicating investors are choosing America. As Tom directly stated:
"I've had this on, I've heard this from half a dozen people that they just inside the room, was talking to Marty Armstrong about this, I was talking to other people and they're all the same thing. Like inside the room, they just think they can wait Trump out." - Tom Luongo
Meanwhile, European nations are discussing repatriating their gold from New York, a move that signals growing tension. Luongo warned that European entities may weaponize their treasury holdings against the US, potentially triggering market instability. But this strategy faces headwinds as the Trump administration attacks on multiple fronts: trade policy, NATO funding requirements, and regulatory overhauls. The historical pattern suggests Europe will resort to financial conflict when threatened - a pattern both Luongo and I believe is already underway.
Check out the full podcast here for more on China's economic troubles, Trump's tariff strategy, and Bitcoin's role in the coming monetary reset.
Trump Raises China Tariffs to 125%, Offers 90-Day Pause for Others - via X
China, Russia Use Bitcoin for Energy Trades - via X
Pakistan Allocates Surplus Electricity to Bitcoin, AI - via X
O'Leary Advocates 400% Tariffs on China - via X
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Final thought...
It's one of those days where I find it hard to believe that Bernie Mac is no longer with us. Rest in peace, king.
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