The power of US Goverment is mininishing. So The price of Bitcoin is rising. The interests rate of US 30 years Teasury Bonds will rise continuously and the speed of Bitcoin Rising will increase. Well Balanced Portfolio should be prepared for Retirements.
The S&P 500 just ticked up about 0.45%, and the Nasdaq followed right along with it. It looks like the market is slowly catching its breath, especially after Secretary Bessent announced he’d actively step in to buy government bonds. The VIX has even dropped around 5% to 15.21, which clearly shows that investor sentiment is warming up a bit.
With the midterms less than two months away, there are rumors floating around that Bessent and Trump might try to re-engage in talks with Kim Jong-un just to get some visible political wins. There’s also some worry brewing that the US might be playing with fire by actively intervening to push foreign bond yields down to 2%. If bond yields drop, asset prices will likely go up, which has some people worried about a spike in short selling.
On the bright side, the PMI index bumped up from 54.95 to 56, meaning producers are feeling a lot more confident, and it looks like we’re in an economic expansion phase. Even Home Depot, which is a great bellwether for retail, is showing solid earnings. Because of this, the odds of a rate hike in December just jumped from 67% to 72%. Ray Dalio has been out there warning everyone to hedge with gold or Bitcoin because the US debt crisis could trigger a massive stock market crash.
Will the surge in US long-term bond yields and the $40 trillion debt weaken American hegemony? Back in the 1930s, Britain dominated global finance, and the US was basically the new kid on the block. But through two World Wars, the pound weakened, the dollar surged, and American technological and capitalist advancements secured its global dominance.
By the 2000s, China’s economy exploded, becoming the G2. Europe, which used to influence the whole world, is now struggling with slow tech innovation, economic sluggishness, and complex internal political and refugee issues, leading to a weak Euro.
The currencies that directly impact the US 30-year bond yield are the Japanese Yen and the Korean Won. Since the dollar is tied to US bonds, and Japan holds the most US debt right after the US itself, Secretary Bessent reportedly visited Japan to apply some pressure. He basically told them that if they need dollars, they shouldn't sell US bonds; instead, they should park their dollar bonds at the Fed and borrow dollars at a high interest rate to supply liquidity. Japan is currently enjoying a stock market revival thanks to the semiconductor boom, seeing some inflation and economic growth, so they probably won't want to upset the US. The US has also warned Korea not to intervene in its exchange rates, threatening to label them a currency manipulator. Honestly, to me, this just looks like a hegemon flexing on weaker nations to sheer the sheep.
So, do we really need to know all this global macro stuff just to grow our retirement accounts? Personally, I study the direction of US bonds just to keep my economic senses sharp. But as I mentioned in a previous post, the harsh reality is that after our peak earning years around 55 or 60, incomes drop while medical bills skyrocket. If you look at bankruptcy rates among the elderly in developed aging countries like Europe, Japan, and Korea, the rate of legal bankruptcy in their 60s is alarmingly high. Populations are aging, birth rates are dropping, and governments can't seem to increase welfare budgets or update laws fast enough to protect seniors.
You might think, "If I just grow my retirement assets, I can live worry-free until I'm 100, right?" I used to think the exact same thing. I figured if I just dollar-cost averaged into US stock ETFs, internationally diversified VXUS, high-quality US bonds (BND), and gold (IAUM) every payday, I'd be golden. The backtests always look amazing on paper. What I didn't expect, and what those backtests don't show, is that medical costs universally spike around ages 60, 65, and 75. A trip to the ICU or needing a 24-hour caregiver drains massive amounts of money.
As retirement approaches, I started running more detailed, conservative scenarios. I realized that a vast majority of seniors over 60 drain almost all their retirement assets due to declining health. In my conservative model, assuming living expenses of 2.5 million KRW, adding 1 million KRW monthly for couple's medical bills starting at 65, and 2 million KRW for caregiver costs starting at 75, you'd go bankrupt before you even turn 60. I even factored in a declining income over time—earning 3.5m until 55, dropping to 2.5m at 56, 1.5m at 60, and 500k at 65. Even assuming some income after 60 (which is tough), if you assume zero income, you go bust at 57.
Please read up carefully and protect your assets so they last until you're 100!
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