### Dollar Situation
China is currently selling Treasury bonds and buying physical gold instead, causing the dollar to lose value. The dollar’s decline is particularly pronounced compared to previous weak dollar trends.
### Treasury Bonds
The liquidity issues surrounding Treasury bonds and the decreasing demand for these assets are concerning. The dollar is losing value in a way that is not typical of economic crises.
### Gold and Silver
Gold prices are experiencing a sharp increase in the market, reflecting fear in the market. While silver is lagging behind gold, it seems likely that its value will increase soon.
### Market Outlook
The past week marked a significant moment in history; it was a week of fear across all markets. While some assets provided a shelter from this fear, others suffered, revealing the volatility of investor sentiment. I prefer a scenario where the dollar moves slowly and steadily downward, while gold and silver rise in a similar manner.
### Historical Context
Did you know that there was a time in U.S. history when there was no income tax? During that time, tariffs financed imports and the country maintained its net credit status. The trade balance supported the U.S. significantly for decades. This raises an interesting question: Is the U.S. now effectively “robbing” countries that previously benefited from it? Historically, the U.S. was a powerful empire that did not need to impose income taxes as a source of revenue. But as the government moved away from tariffs, it looked for alternative sources of revenue and so introduced income taxes.
### Tariffs and Income Taxes
What if tariffs could replace income taxes? This concept presents a fascinating topic for discussion. However, I have not heard any comments from the White House on how tariff revenues would be used. This assessment raises deeper thoughts about the balance between economic sustainability, tax fairness, and government spending management.
### Treasury Bonds and the VIX
Treasury bond fluctuations are closely correlated with the VIX, as these bonds are generally considered safe-haven investments. When market uncertainty increases, investors often flock to Treasuries for safety. However, recent selling pressure and rising yields point to a decline in corporate bonds