Could US Treasuries Become the Trade of the Decade?

The expediencies and policy extremes have yet to be explored, much less exploited.

CHARLES HUGH SMITH APR 9 Which brings us to US Treasuries. The expedient game plan for the past 15 years was to inflate a global Everything Bubble via expanding "money"-printing, debt and leverage, on the implausible but oh-so appealing theories that 1) borrowing more from future earnings and resources was painless and 2) inflating the wealth of the already-wealthy would generate a pain-free "wealth effect" some of which would trickle down to the working stiffs who don't own any of the assets being pushed into orbit. The first step in crisis is to save what must be saved to keep the ship afloat: the federal government's ability to borrow more money and float that rising debt by selling Treasury bonds. This isn't just a necessity for the domestic status quo, it's also a necessity for the Imperial Project, which must have the capacity to "export" dollars in size globally to preserve the benefits of issuing a reserve currency. The obvious way to save what must be saved is to reward owners of Treasuries and punish everyone else: make owning Treasuries safer and more lucrative than owning any other asset. The new game will be to push a significant percentage of the $300 trillion in bubble-assets sloshing around the global economy into Treasuries. The grab-bag of policy options is capacious: everything from outright expropriation to wealth taxes to windfall taxes to restrictions on ownership are all available: mix and match, try a few or try them all. All of these policies rewarding Treasury owners and punishing every other asset class can be sold as serving the public good and protecting us from risk. Every one can start with a single twist of a screw that is then tightened at regular intervals. DYI:  This is a real possibility of taxation policies changing to punish everything except ownership of U.S. Treasury securities.  Exploding Federal deficits will be a funding nightmare as interest rates ratchet higher and higher over the coming years.  In order to stop this nightmare scenario punish (tax) non treasuries and provide sweeteners (less tax) for ownership of treasuries. This is not my forecast however it is something to keep our eyes and ears open to changes in tax laws as every fifty years or so sweeping changes have occurred since the U.S. was born.  The last change was from the failed president of Jimmy Carter to the successful Ronald Reagan (January 20, 1981 – January 20, 1989) who kicked off the pro-business government movement.  So…Fifty years in the future is 2031 if this cycle holds who ever becomes president (Jan. 2025) will be seen historically as a failed president due to the tidal wave size economic sea change at this president’s door step.  Not until the 2030’s will Federal financing needs be placed above all other asset classes by tax policy (if this fifty year cycle holds). DYI