Nobody Wants US Treasuries

 

https://www.semafor.com/article/11/28/2023/nobody-wants-us-treasury-bonds

News articles are often full of contradictions. In this article, the use of the concept "why" is being paired with government borrowing. 

“There’s just a lot less demand than there was even six months ago,” Goldman Sachs’ Jim Esposito said last week. “You can buy a 6-month T-bill that’s yielding north of 5%. Why wouldn’t you buy that instead of a long bond that’s yielding 4¾?”

The error lies not in the statement itself. Few people are so aloof and oblivious to state contradictions outright. This is why they are hard to spot and people feel justified in living even though a further analysis reveals a great error. The principles of reason, however, the very essence of the word "why", demands a consistent and fully integrated non-contradictory thought process. Therefore, I will attempt here to explain where Esposito has made his error and postulate on the reasons why. 

The first point to make it in justifying the use of the word "why". A person who is motivated by why is motivated by reason. They want reasons for doing something. We might also say "Give me a reason for why I should do this?" Here Esposito is looking at yields on government bonds and asking "give me a a reason why I should receive less money for more risk when I have an option to receive more money for less risk?" This is what he means when he says "You can buy a 6-month T-bill that’s yielding north of 5%. Why wouldn’t you buy that instead of a long bond that’s yielding 4¾?”. In this analysis, we can see that Esposito is comfortable employing selfish rational thought to a personal financial decision. He holds up himself as a person who sees what he sees and acts accordingly, refusing to sacrifice a greater value to a lesser value. 

The error comes in the context of his reasoning. The context is money and government bonds. The object of his assessment is a fiat currency which means a currency forced on a population of people like Esposito. This introduces the contradiction since force and reason are opposites. Force doesn't concern itself with reasons. If it did, it wouldn't use force. Government bonds are not rational instruments no more than the bounty of plunder is a productive enterprise. Applying the concept of why further, why would Esposito want the product of government bonds, namely yield in US Dollars? Presumably its because he believes other people want dollars? Applying further, why do other people want dollars? The only rational answer to this is because the government forces them to have dollars for a variety of reasons which I will highlight a few:

1. People are forced to take dollars to pay taxes. If they don't pay taxes in dollars, the government will use force
2. Nations are forced to pay for oil in dollars. If they don't, the government will use force. The government might also use a form of force known as corruption, whereas money stolen from a population is used to provide goods like military equipment or foreign aid. This is only a hidden form of force, since the goods are a product of theft. 
3. Other people are willing to trade dollars for goods and services. This too is like a form of corruption, since the demand for dollars is not the value of the dollars themselves, but the fear of the force instituted in the tax system. 

Going back to Esposito, he claims to be a rational actor yet he is not taking into account the consequences of this government intervention and use of force. The reasons he wants dollars is to have the products that dollars can buy. But the products that dollars can buy can only be created by a rational process, which is a voluntary act. In so far as the government is abusing the rationality of the markets with force and coercion, the products of the market will start to deteriorate and begin reflecting the nature of force, which is destruction. Free choice is fountainhead that starts and maintains a process of purposeful action. In so far as people stop pretending to be motivated by threats of violence, the illusion of the value of force will cease. This in turn will cause the fiat imposters of value, like the dollar, legislatures, and other forms of forceful regulation to implode, leaving people like Esposito owning worthless digits on a screen or piles of worthless paper. 

Therefore, while people like Esposito claim to be driven by value, why would people like him want to have less value for more risk when there is an option for him to have more with less risk. The risk is obvious when it comes to dollars. It's an illusion, an instrument of control, powerless to create one thing of value in and of itself. All that is needed to bring it down is a person seeing what they see and acting accordingly. Why would anyone want a life and a world with more force when he could have a world with more reason? People like Esposito demonstrate they have the capacity for rational thinking in the moment. This is no different than the thief who might say "Why would I spend 40 hours a week to make $1000 when I could spend 1 hour stealing it from my neighbor?" At one level, they are betraying their rationality at the same time they are deploying it! Are they willing to apply rational thinking to the long-term? Are they willing to apply reason to the quality of money and the necessary outcome of government spending? Are they willing to consider that the most rational urge is to survive and to extend one's life not just moment to moment but for as long as possible? 

Today, nobody wants US Treasuries. May this be a hopeful sign that people are waking up to the nature of their needs and a commitment to providing for their selves and their values across time and space. If that is the trend, watch for the illusory value of the dollar to collapse in the presence of real and physical assets like Gold and Silver. Why wouldn't you buy that instead of holding an empty promise nobody wants?

In summary, the urge of the rational thinker is to be rational at all times. He does not permit himself to pretend to see what he doesn't see. Like the child who had the courage to say the emperor was naked, he questions and exposes illusions with the light of his perspective. He aims to seek the truth and truly know what he knows. He doesn't confuse force with reason and doesn't let the elements of force to mix with the products of his mind. He rejects force as a reason, and thereby rejects fiat currency. 

This means he owns his concepts all the way to their source, that is his own observations. 

Our concepts, words, and ideas are windows, a kind of mental vision, providing us with an ability to see beyond our animal instincts through space and time. To partially own the concepts of one's life is to be like a man whose windows are dirty with messy thinking or papered over with borrowed narratives, like propaganda, accepted lies, or unverified and untested opinions of others. On the other side of those papered windows are the enemies of reason, the opponents of thought, and the destroyers of men. Make it your aim to install as many windows into the nature of reality as you can by owning your words through and through, and committing to a process of non-contradictory thinking. Clean up your muddied thoughts, rip down the paper screens, and watch the world open up to you in new and exciting ways. Understand the nature of concepts like "money", "reason", "truth", and "value". Recognize that it is you who have the responsibility to know what you know and the only sin you can commit is against yourself, the sin of not thinking and of willful irrationality. Such is the way to confusion, poverty, frustration, victimization, smallness, failure, sickness, and death. Such is the way of the thief, the murderer, the lier, the slave, and the slave owner. Reject this life for truth, love, purpose, reason, responsibility, integrity, life, wealth, and success across time, space, and all the dynamics and relationships of your existence.