he last empire that couldn't fund its navy lost the world's reserve currency, and America just paid the highest rate for 30-year money since 2001
https://x.com/MarioNawfal/status/2089476188867617248
The last empire that couldn't fund its navy lost the world's reserve currency, and America just paid the highest rate for 30-year money since 2001
Britain won the Second World War and still lost the throne.
Jay's telling of it is the sharpest history lesson on the board: in 1956, London sent its navy to retake the Suez Canal, couldn't pay for the operation without American financing, and Washington used that leverage to order the ships home.
Only then did the world's central banks start swapping sterling for dollars, because reserves don't move on defeat, they move on a visible moment of incapacity.
His mechanics of the present are what make it land.
Washington needs the world to keep funding a $2 trillion annual gap, but the closed strait cut off the UAE's cash flow, and countries starved of income sell Treasuries to pay bills, which pushes yields up and forces every new auction to pay more. Last week's 30-year cleared at 5.22%, the highest since 2001.
So Washington built quiet plumbing instead: swap lines extended to the Gulf, and a facility letting Japan borrow against its $1.1 trillion in Treasuries rather than sell them.
And the promise that pipelines make Hormuz irrelevant in two years? Jay walks the arithmetic and finds the loading terminals, not the pipes, are the wall.
posted by Satish Sharma at
08:48
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