It Started: The US Debt Bomb Just Imploded

Thanks to SoFi for sponsoring the video! Click here to sign-up for SoFi Crypto: https://sofi.com/graham | Let's talk about The Bond Market Collapse, and why this is concern for investors - Thanks For Watching! Add me on Instagram: GPStephan START BUILDING WEALTH WITH MY FREE NEWSLETTER: https://grahamstephan.substack.com BOND YIELDS SPIKING Interest rates are rising to levels not seen since the Great Financial Crisis, and the reason comes down to bond yields. Bonds are basically IOUs from the government: investors lend money today, collect interest, and get their original money back later. U.S. Treasuries are usually considered the safest investment in the world, but prices are falling and yields are rising, meaning investors now want a higher return to keep lending money. WHY BOND PRICES ARE FALLING Bond prices and bond yields move in opposite directions. When investors buy bonds, prices rise and yields fall. When investors sell bonds, prices fall and yields rise. So when people say “yields are spiking,” it means investors are selling government debt or refusing to buy unless they get paid more. If the safest borrower in the world has to pay more, every other borrower has to adjust around that higher rate. THE THREE FORCES The bond market is being hit by inflation, oil, and government debt all at once. Inflation is rising again, oil prices are spiking from conflict in the Middle East, and the U.S. government is running massive deficits that require issuing more bonds. At the same time, foreign buyers like Japan have less reason to buy U.S. Treasuries when their own yields are becoming more attractive. WHY 5% YIELDS MATTER A 5% Treasury yield changes the math for everything. If investors can earn around 5% from the government, they start asking why they should risk money in stocks, real estate, corporate debt, or private investments unless the return is meaningfully higher. That puts pressure on asset prices, mortgages, banks, real estate, and the government’s