THEY’RE WRONG: Why the Treasury’s Latest Move Is a Huge Warning for the Dollar | Andy Schectman

THEY’RE WRONG: Why the Treasury’s Latest Move Is a Huge Warning for the Dollar | Andy Schectman

Japan holds roughly $1.5 trillion in US Treasuries. This month it was discouraged from selling a block of that position — and that single fact tells the gold and silver market more than any inflation print. Twice in August, Treasury Secretary Scott Bessent moved to manage an outcome in a market that is supposed to set its own price. Treasury doubled its buyback operations from $2 billion per cycle to $4 billion per operation, aimed at the 10, 20 and 30-year maturities, beginning in September. Bessent then made clear, in comments reported by CNBC, that the Treasury General Account — close to $1 trillion in cash — is available to fund those buybacks. Andy Schectman, CEO of Miles Franklin Precious Metals, calls that sequence yield curve control by another name. His argument is not about the price of gold. It is about price discovery: a bond market that has to be managed at the long end is a market that has stopped clearing on its own. The numbers behind the intervention: • $3.8 billion a day in federal interest expense right now • $5 billion a day projected by 2028 (Congressional Budget Office) — more than Medicare ($3.1bn/day) and defense ($2.5bn/day) combined • Above roughly 5% on the 10-year, the expense compounds faster than any fiscal plan absorbs it • President Trump, asked about tools to bring long-term yields down, described different kinds of intervention and called the military the ultimate one The demand side is already responding: • Goldman Sachs now calls its $4,900 gold target a base case rather than a ceiling, flagging significant upside risk • $22 billion into gold futures across three weeks — the largest such positioning in more than a decade • China bought 40 tons in the London OTC market in June against 15 tons officially declared (+167%); May was 48 tons against 10 (+380%) — World Gold Council data • Central banks reported 16 tons for Q1. The Council’s estimate was 244 tons — roughly 15 times the declared figure • The Strategic Petroleum Reserve has been drawn to its lowest level in more than 40 years, removing the cushion that has masked energy costs Schectman’s conclusion is defensive rather than directional: hold assets, weight them by liquidity, and measure the portfolio in ounces rather than in dollars.