The ‘debasement trade’ and why crypto and gold are surging

MDJASHIM - stock.adobe.com On August 19, Treasury Secretary Scott Bessent announced the department will double the size of its buyback operations for longer-dated securities from $2 billion per batch to $4 billion. The stated goal of this operation is to bring the yields down for bonds between 10- and 30-year durations, which is another way of saying the government wants to make money cheaper to borrow. It didn’t exactly work. After a brief dip in long-dated bond yields, the cost of borrowing returned to its multi-year highs. Meanwhile, the dollar as measured by the ICE dollar index fell nearly 1% on the news, putting the dollar down 2.5% since its recent July high. Money managers who first talked about the “debasement trade” in February started talking about it again. What is the debaseme