Kevin C. Smith, CFA expert

Financial expert

[Kevin C. Smith, CFA expert @crescatkevinexp]

Free cash flow race to the bottom.

[Lukas Ekwueme @ekwufinance]

The US cant afford higher rates

- In the next 12 months, around $8T of Treasuries need to be rolled.
- The average coupon on that stack is about 3.3%.
- The 1‑year Treasury is roughly 4%.

Rolling that $8T at today’s 1‑year level would add around $49B in annual interest costs, and that’s before you factor in the interest burden on an ongoing $2T annual deficit.

Volcker could crush inflation with double‑digit rates because inflation had already driven debt‑to‑GDP down from about 100% to around 30%.

First you inflate the debt away, then you raise rates to kill inflation.

[EndGame Macro @onechancefreedm]

China Is Not Making The Yuan Supreme. It Is Protecting The Banks

Chinese banks raising margin requirements on gold and silver deferred contracts is not a small technical adjustment. Huaxia moved gold from 35% to 120% and silver from 42% to 120%. Guangfa pushed gold and silver margin to 140%. Bank of China moved contracts to 120%.

At those levels, leverage dies. Traders are being told to fully fund the trade or get out.

The Real Signal

The cleanest read is domestic risk control. Banks are trying to stop households from carrying leveraged metals exposure after a violent run up and breakdown.

China is already caught in a deflationary loop. Property wealth has been damaged. Consumers are cautious. Companies are cutting prices to survive. Factories are producing too much into weak demand. Profits are squeezed. Wages and hiring weaken. Then consumption weakens again.

Gold and silver become pressure valves in that economy. When people lose faith in property, stocks, wages, or future growth, they look for places to hide purchasing power. But if that becomes leverage, a sharp fall in silver can trigger margin calls, forced selling, household losses, and political pressure.

This is not proof of strength. It is a sign authorities saw speculative heat and moved to contain it.

What It Does Not Mean

The mistake is turning this into proof that China is building a gold and silver wall for RMB internationalization.

This applies to metals trading through banks. It is not a shutdown of institutional trading, a global silver supply event, proof of a gold backed yuan, or evidence that the RMB is replacing the dollar.

China is building RMB settlement rails, and some trade partners want non dollar options. But settlement is not reserve status. A reserve currency requires deep bond markets, open exits, convertibility, hedging markets, and confidence that money can leave.

China wants more RMB use, but also wants capital controls, exchange rate management, and political control over flows. Those goals conflict.

The Deflation Story

China is trying to export its way out of weak domestic demand. Property wealth is impaired. Households are saving instead of spending. State credit keeps flowing into factories. EVs, solar, batteries, robotics, and high tech capacity are expanding faster than demand can absorb.

That creates price wars, crushes margins, pressures jobs and wages, and hurts consumption. Then the state pushes more production to offset the weakness.

This margin move fits a government trying to control every escape valve at once. Support factories. Manage the currency. Contain speculation. Prevent household losses. Keep capital inside.

My Take

This is not a major RMB breakthrough. It is a deleveraging move inside a stressed economy.

For silver, it helps explain the sharp decline. The physical market can still be tight, but paper markets dominate when leveraged buyers are forced out. At 120% to 140% margin, the marginal speculative buyer disappears.

China is not showing the yuan is ready to replace the dollar. It is showing that a deflationary economy with weak property wealth, excess capacity, and cautious consumers cannot afford a leveraged metals casino.

[PeerMetals @peer_metals]

China just ordered a mass forced liquidation. 🚨

China Construction Bank. July 24.

Every personal account in precious metal futures. Gone.

Paper gold. Paper silver. All shut down.

The 4th major state-owned bank to do this.

ICBC. Postal Savings Bank. Ping An Bank. Now this one.

Combined, these banks hold trillions in assets.

China isn't tweaking the rules.

China is pulling retail out of the system completely.

#Gold #Silver #CentralBanks

[Lukas Ekwueme @ekwufinance]

Central banks bought 15x more gold than they officially reported.

- Reported: 16 tonnes
- Unreported: 244 tonnes

Central bank gold demand is way stronger than most investor realize

[Kevin C. Smith, CFA expert @crescatkevinexp]

@bobbys_kitten is this working