Winter's Coming

Friday April 11th, 2025 - Issue # 102

(Any views expressed below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

Sorry — PRINTER’S coming. I think the printer's definitely coming. Forgive me, I’ve been perpetually cold and haven’t seen a ray of sunlight since I returned from El Salvador earlier this week.

I wasn’t even planning to write a newsletter this week because, firstly, my brain’s still catching up from traveling and secondly, I am not feeling very confident in my views — I don’t think anyone outside of the few pulling the strings are or should be. But sitting at the kitchen table watching wet snow fall on this miserable day in April…APRIL…it feels wrong not to unpack some of the insanity we've just witnessed.

The past few days in markets have felt historic — and not in the “yay BTC all time highs” way. Volatility has been off the charts; I've never seen swings this aggressive. Stocks are whipping around like penny stocks cryptos, while gold quietly smashed through $3,200 an ounce.

The markets were so volatile this week that S&P volatility now matches BTC! Mainstream is getting a taste of what it’s like to be one of us 😎

But the real story is in bonds. The 30-year U.S. Treasury yield just spiked to nearly 5%, marking its biggest weekly jump in decades. Something broke, and markets are finally noticing.

Trump’s aggressive tariff plan — meant to reverse trade imbalances and revive domestic manufacturing — may have just backfired spectacularly. With fewer foreign trade surpluses, there are fewer dollars abroad to soak up U.S. Treasuries, sending bond yields soaring. Politically, it plays well — “America First” and all — but economically, it risks becoming a massive own goal. It’s no surprise Trump suddenly announced a 90-day pause and scaled the Reciprocal Tariff down to 10% during the “review period.” If this were baseball, the ump would’ve called a balk.

I can’t believe Peter Schiff is making an appearance but yesterday something very important happened that I’ve not seen many people talking about.

Yesterday’s razor-thin House vote (216–214) pushed Trump’s “Big Beautiful Bill” one step closer to reality. It’s a major milestone — not just because it aligns the House and Senate on a unified fiscal framework, but because it unlocks the reconciliation process, letting Republicans start drafting the real meat of Trump’s economic playbook: tax cuts, tariffs, and spending reform. Buried in that resolution? A record-breaking $5 trillion debt ceiling hike — the largest ever — to avoid a default on the U.S.’s $36.6 trillion and climbing tab.

It wasn’t easy. GOP leaders had to promise at least $1.5 trillion in spending cuts to appease fiscal hawks, while trying not to alienate moderates worried about gutting programs like Medicaid. Democrats are unified in opposition, calling it a handout to the rich. But all politics aside, here’s the signal markets should be watching: this isn’t about belt-tightening — it’s setup. The kind of setup that brings back spending, stimulus, and eventually… liquidity. Tariffs might’ve spooked the market, but this? This could be the mother of all pivots.

This might not be the best time to pick an economic fight with China — or, frankly, the rest of the world. The U.S. hasn’t exactly made it easier to attract foreign capital at a moment when we need it most. With fewer export dollars in circulation, demand for Treasuries is drying up — and with $9 trillion in debt maturing this year, that’s a massive problem. The math doesn’t work unless someone fills the gap.

And there’s only one someone left.

The Fed and the U.S. banking system are about to become the buyer of last resort — again. Whether it’s called QE or dressed up as something else, the printer’s coming. Maybe not tomorrow. Maybe not with a flashy press conference. But make no mistake: this setup only ends with more liquidity. It has to.

Trump’s team might’ve thought they could play hardball on trade, pump spending, and keep bond yields tame all at once — but markets just reminded them how delicate that balance really is. And now, between tariffs, deficits, and political pressure to avoid a meltdown before November…the Fed’s hand is getting forced.

Winter’s still lingering, sure — but if you listen closely, you can already hear the hum of the printer warming up.

Keep your head on a swivel; it’s going to be a wild ride.

Interesting charts I came across on X this morning…

Stay warm, stack sats.