For the Sake of Our Money, Scott Bessent Needs to Shut Up

[Celerity]

The more thuggish the treasury secretary gets, the more reason to fear the economy will tank.

https://newrepublic.com/article/205730/scott-bessent-belligerence-market-downturn

https://archive.ph/VcAEm



It doesn’t reflect well on a treasury secretary when the price of gold goes through the roof. As I explained in October (“Gold Is Booming and That’s Really Bad News”), it means people expect higher inflation and are losing faith in the stock market along with the overall health of the economy. In such moments, Wall Street longs for a steady hand at the helm. Instead, they get Treasury Secretary Scott Bessent hurling insults in every direction and giving every impression that he’s about to have a nervous breakdown. Bessent previously enjoyed a reputation as the sole grown-up in Trump’s Cabinet. But at Davos last week, Bessent engaged in a frantic sort of MAGA minstrelsy, or possibly he converted under duress into a true-believing thug. I’m not sure it matters. But the more Bessent shoots his trash-talking mouth off, the more the dollar’s value falls and the higher the price of gold rises. Probably the best thing Bessent could do right now—for himself, for the dollar, and for your 401(k)—is to shut the fuck up.

I predicted in late October that a stock market crash was imminent. It didn’t happen, and as I write this the S&P 500 is rising. But a lot of experts still say some sort of correction is coming. Rising gold prices reflect that belief. Wall Street refers to the gold market as a “debasement trade”—the debased object being the dollar. An ounce of gold rose in price Monday morning to $5,100 per ounce, up from $4,000 per ounce three months earlier. For comparison’s sake, when gold was discovered at Sutter’s Mill in 1848, an ounce was priced at $20.67, or about $850 after inflation. That was enough to hurry California into statehood two years later and to triple its population by 1860. Today, an ounce of gold sells for six times that amount, and amateur California prospectors are panning once again for gold. But a much easier path is to invest in gold while the Trump administration trashes the rules-based international order.

“Scott Bessent Is In Denial” was the headline last week on a Project Syndicate op-ed by Desmond Lachman, a former deputy director of the International Monetary Fund’s Policy Development and Review Department now at the conservative American Enterprise Institute. “As Treasury secretary,” Lachman wrote, “Bessent is supporting a grossly irresponsible budget and foreign policy, which is putting the United States on a path to economic ruin.” The deficit, which was $1.8 trillion when Trump entered office, is projected, Lachman noted, to (nearly) double by the end of this decade to $3.4 trillion. The dollar has lost 10 percent of its value over the past year, and over the past 16 months the 10-year Treasury yield has risen 50 basis points. (That’s bad because it means investors aren’t buying Treasury bonds.) Instead of “continuing to back Trump’s reckless policies”—polymorphous tariffs, tax cuts we can’t afford, an insane threat to conquer Greenland, etc.—Bessent should “be highlighting the danger of undermining foreign investors’ confidence in the U.S.”

But Lachman understated the problem. At Davos, Bessent transitioned from merely backing Trump’s policies to egging them on—madly and belligerently. After Trump threatened Western Europe with tariffs to punish it for opposing his proposed conquest of Greenland, Bessent publicly insulted these countries at Davos by saying their angry reaction was “the same kind of hysteria that we heard on April 2,” when Trump announced a 10 percent tariff on all imports and higher ones on countries that didn’t import from the United States as much as they exported. “What I’m urging everyone there to do,” Bessent said condescendingly, “is sit back, take a deep breath, and let things play out.… The worst thing countries can do is escalate against the United States.” As it happens, escalating turned out to be the very best option. Ignoring Bessent, the Europeans punched back hard with a threatened $93 billion in retaliatory measures. That spooked the stock market, which in turn persuaded Trump to back down.

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[Haggard Celine]

1. He looks like the Church Lady in that picture.

Looks like he's saying "isn't that special?"

[bucolic_frolic]

2. All forms of wealth have their particular vulnerabilities

Reset is bandied about. They can't let the whole thing collapse, their money flows would stop. Gold, for example, has to be priced by some metric, be it dollars or another currency. Real estate is tangible but immobile, and requires funds to pay taxes.

Japan is lowering interest rates, and the carry trade - cheap yen to buy US Treasuries (and it may be more complicated than that) - is scaling down.

Devaluing the US Dollar and revaluing it in crypto is not beyond imagination. Buy what you need, they can't steal your shoes.

[Bev54]

3. Scott Bessent needs to stay out of Canadian politics. He is up here in Alberta urging

on the separatists. He lied about Carney's phone call with Trump (Trump called Carney) and is just generally being an asshole. I am so sick of US politicians inserting themselves in our internal affairs.

[JCMach1]

4. Trump wants to tank the dollar

It has been part of the plan all along.

[Hey Joe]

5. That bespectacled Howdy Doody looking

Psychopath is all in on king Dipshits agenda,
enriching the rich and driving everyone else into poverty.