The week just past may have been the most consequential of the year.
Treasury Secretary Scott Bessent's Wednesday announcement that his department would commence repurchasing its own bonds in larger amounts with greater frequency - a decision made to help tamp down rising yields - set off a firestorm in the debt markets and sent precious metals soaring.
Coming just a day after total U.S. broke through $40 trillion, Bessent's maneuver and his yen swap line creation three weeks ago, set an unruly tone in treasuries and other major funding sources. With international appetite for treasuries waning and the AI infrastructure funding crowding out treasuries, yields on 10-year notes and 30-year bonds had reached crisis levels, the yield on the 30-year at a 19-year high, a far cry from the QE experiments of Ben Bernanke and Janet Yellen, whose efforts toward ZIRP (zero interest rate policy) decimated the value of the dollar and eventually resulted in the highest inflation since the 1970s.
Bessent alone isn't going to be able to reverse an already unstable course for the treasury market. Rather than instill a feeling that he is helping to stabilize the bond market, his actions reek of fear and panic, a signal the markets are sure to take very seriously. By the end of the week, yield on 30-year bonds had fallen from a high of 5.34% to 5.27%, but the 10-year failed to get the memo, dropping on Wednesday's announcement only to head right back up, Friday's closeout figure standing at 4.74%.
In addition to Bessent's ham-handed attempt at easing an out-of-control situation, conditions in the ongoing Mideast conflict remained unresolved, with the United States on its back foot, still threatening economic or military destruction of Iran while the Persian Gulf and the Strait of Hormuz remained largely cut off. With the Yemeni Houthis wresting control of Red Sea transit, the balance of power in the region has shifted in favor of Iran and Oman, with Arab countries mulling prospects of decoupling with the United States.
Since the U.S. has failed to protect the Gulf states, the Saudis, Kuwaitis, and other countries like the UAE and Qatar are not exactly what one might call reliable allies in the region. These conditions sent Brent and WTI crude futures to their highest levels in nearly a month, with prospects for further gains now heavily dependent on resolution to the closing of international choke-points. The Strait of Hormuz being the most important passageway for oil and other important industrial commodities such as sulfur and helium.
These developments spilled over into markets ina very big way and are also threatening to have lasting effects on the lives of ordinary citizens in the U.S. and Europe especially.
The biggest laughs of the week came from Secretary Bessent and President Trump, both of who insisted that the U.S. could grow its way oout of debt.
Bessent, Thursday, on CNBC: “…There’s nothing magic about the $40 trillion number. And we can grow our way out of that. So, but what we do want to signal is, I think that there’s been a lot of misinformation in terms of what’s going on with the deficit, what’s going on with the deficit to GDP.”
Trump, Wednesday, at the White House: “We could have GDP of 10, 12, 15 times if they just leave us alone. Let interest rates go down. It’s a very unfair system. They should drop interest rates because it means we have a strong country and it’s all based on credit, meaning good credit, and we have the best credit and we’d pay off the debt very easily, very quickly.”
$40 trillion, the American public and the markets said, "hold my beer."
For more illuminating information on Bessent's gambit and the Trump "put", refer to the excellent weekly commentary by Doug Nolan at his Credit Bubble Bulletin. Hat tip to Nolan for coining the term, “Terminal Phase Excess”. Brilliant and poignant.
Stocks
It was a pretty busy, and scary, week for stocks, with all of the major indices losing ground. The NASDAQ was the big loser, falling more than two percent. The S&P and Dow were down 1.43% and 0.85% respectively. Stocks remain near all-time highs, with plenty of liquidity in the market, though there are ominous signs of interdiction through political means to keep the stock market cruising along until the midterms.
That line of thinking encourages profit-taking, but not everybody is convinced that the stock market will correct or take a deep dive. Stocks are vulnerable to a variety of shocks and September and October are traditionally not encouraging. Most investors are still of the passive variety, predisposed ot ride the wave in 401k accounts, IRAs or other long-term portfolios.
While the chances for a crash are roughly 40:60 in favor of stocks remaining buoyant, there's no tellin gwhat will come of the larger credit markets. Bankruptcies, foreclosures, and auto repossessions are all on the rise.
Earnings season is just about over, though a number of important, mostly retail names will be reporting in the week ahead.
Monday: (before open) Napco (NSSC); (after close) PicPay (PICS)
Tuesday: (before open) Dick's Sporting Goods (DKS), ScotiaBank (BNS), SelectQuote (SLQT); (after close) Intuit (INTU), Box (BOX), Electromed (ELMD), Zoom (ZM), Semtech (SMTC)
Wednesday: (before open) Bath & Body Works (BBWI), Williams-Sonoma (WSM), Kohl's (KSS), Abercrombie & Fitch (ANF), J.M. Smucker (SJM); (after close) Nvidia (NVDA), Synopsis (SNPS), Crowdstrike (CRWD), SalesForce (CRM)
Thursday: (before open) Dollar General (DG), DollarTree (DLTR), Best Buy (BBY), Burlington (BURL), TD Bank (TD), CIBC (CM), Hormal Foods (HRL); (after close) Autodesk (ADSK), Workday (WDAY), Gap Inc. (GAP), Affirm (AFRM, Ulta Beauty (ULTA), Marvell (MRVL)
Looking ahead to the economic calendar, Tuesday brings forward the Case-Shiller monthly national home price index, New Home Sales for July and the Richmond Fed. Wednesday offers the PCE monthly and year-over-year index, durable goods orders and the second estimate of 2nd quarter GDP (initial estimate was 1.5%). Thursday reveals retail and wholesale inventories, and initial and continuing weekly jobless claims.
Relevant data releases can be found at Trading View.
Treasury Yield Curve Rates
| Date | 1 Mo | 1.5 mo | 2 Mo | 3 Mo | 4 Mo | 6 Mo | 1 Yr |
| 07/17/2026 | 3.73 | 3.75 | 3.80 | 3.85 | 3.91 | 3.96 | 4.01 |
| 07/24/2026 | 3.80 | 3.88 | 3.95 | 3.96 | 4.04 | 4.08 | 4.14 |
| 07/31/2026 | 3.78 | 3.80 | 3.85 | 3.83 | 3.92 | 3.98 | 4.08 |
| 08/07/2026 | 3.79 | 3.79 | 3.83 | 3.87 | 3.89 | 3.96 | 4.01 |
| 08/14/2026 | 3.79 | 3.80 | 3.81 | 3.86 | 3.88 | 3.95 | 3.98 |
| 08/21/2026 | 3.80 | 3.77 | 3.80 | 3.88 | 3.90 | 3.95 | 4.03 |
| Date | 2 Yr | 3 Yr | 5 Yr | 7 Yr | 10 Yr | 20 Yr | 30 Yr |
| 07/17/2026 | 4.18 | 4.21 | 4.28 | 4.40 | 4.55 | 5.07 | 5.06 |
| 07/24/2026 | 4.33 | 4.36 | 4.43 | 4.55 | 4.69 | 5.18 | 5.16 |
| 07/31/2026 | 4.28 | 4.34 | 4.45 | 4.59 | 4.75 | 5.28 | 5.27 |
| 08/07/2026 | 4.19 | 4.25 | 4.35 | 4.49 | 4.65 | 5.20 | 5.19 |
| 08/14/2026 | 4.17 | 4.24 | 4.36 | 4.51 | 4.68 | 5.25 | 5.25 |
| 08/21/2026 | 4.24 | 4.31 | 4.43 | 4.57 | 4.74 | 5.25 | 5.27 |
Bessent's parlay this week moved markets, though maybe not in ways he anticipated. While the 30-year yield was tempered, yield on the 10-year - which is ultimately the benchmark - dropped and quickly recovered, as if nothing had happened.
Bessent is facing a squeeze in high quality buyers for U.S. debt. With more and more money directed toward funding the AI buildout and foreign demand drooping, he resorted to somewhat of an emergency tactic, buying back the Treasury's own issuance. It reeks of desperation and can be compared to this twisted logic: buying back your car loan (maybe at a discount), receiving the flow of monthly payments to pay off the loan that still exists. It kind of buys time, but at the end of the day - or the funding period - you end up short of funds and needing to borrow even more. It's not a long-term strategy, but rather an election punt. The midterms are coming and there's little Republicans fear mroe than a Democrat-led Senate and/or House, making deal-marking Trump the lamest of lame ducks.
Bessent's maneuver isn't going to save the system from $40 trillion in debt and interest payments that will push north of $1.5 trillion in fiscal 2027 with an annual deficit estimated to be somewhere between $2 and $3 trillion, a wide range because nobody has a handle on spending.
Japanese 10-year yields traded Tuesday at the highest levels (2.95%) since 1996, so Bessent's swap lines for Japan aren't actually working out so well either. He may be thought to be one of the most innovative and bright Treasury chiefs of all time, but so far, his record has been abysmal. Big hat, no cattle, as they say in Texas.
The high spreads on 2s-10s and full spectrum remained at highs for the year, signaling that Bessent's monkey wrench has little to no grip. Blowing out these spreads risks general havoc in the world's largest funding market.
Having some sectors (AI infrastructure) growing at the expense of others (small business, consumer-facing industries, manufacturing), including the treasury complex, makes Bessent appear weak and possibly at odds with Federal Reserve Chairman Warsh. Until the elections in November, inflation be damned. More robust money flows are necessary to keep the stock market bubbling along as if the funding market is a derivate of it when the exact opposite is true.
Spreads:
2s-10s
2026
1/2: +72
1/9: +64
1/16: +65
1/23: +64
1/30: +74
2/6: +72
2/13: +64
2/20: +60
2/27: +59
3/6: +59
3/13: +55
3/20: +51
3/27: +56
4/3: +51
4/10: +50
4/17: +55
4/24: +53
5/1: +51
5/8: +48
5/15: +50
5/22: +43
5/29: +47
6/5: +38
6/12: +37
6/18: +27
6/26: +31
7/2: +35
7/10: +35
7/17: +37
7/24: +36
7/31: +47
8/7: +46
8/14: +51
8/21: +50
Full Spectrum (30-days - 30-years)
2026
1/2: +114
1/9: +112
1/16: +108
1/23: +104
1/30: +115
2/6: +113
2/13: +97
2/20: +100
2/27: +90
3/6: +102
3/13: +115
3/20: +123
3/27: +124
4/3: +120
4/10: +124
4/17: +119
4/24: +122
5/1: +126
5/8: +124
5/15: +141
5/22: +135
5/29: +127
6/5: +130
6/12: +128
6/18: +121
6/26: +117
7/2: +128
7/10: +135
7/17: +133
7/24: +136
7/31: +149
8/7: +140
8/14: +146
8/21: +147
Oil/Gas
The situation in the Middle East has heated up again with Houthis taking Red Sea shipping to a halt and Iran and Oman working out details on traffic patterns in the Persian Gulf and the Strait of Hormuz, without even a reach-around to U.S. interests. Increasingly sidelined in the Middle East, the U.S. failure in the Gulf region threatens to disrupt global supply chains to breaking points. Already, strategic petroleum reserves in most developed countries have been drained to emergency levels just to keep the price of crude from catapulting past $100/barrel. WTI crude closed out the week at a four week high, $88.15, with Brent nearby ($89.69).
Average price for a gallon of unleaded regular gasoline in the U.S. was $4.04 last week and $4.06 this week, the highest Sunday price in a month. Peace prospects in the Middle East are nil, pushing higher gas prices, with the unstable situation at the Strait of Hormuz keeping prices elevated and consumers annoyed.
Gas prices in key states:
California (leader): $5.60 (+0.04)
Washington: $5.24 (+0.07)
Indiana: $3.51 (lowest) (-0.08)
Oklahoma: $3.79 (+0.11)
Louisiana: $3.68 (+0.16)
Mississippi: $3.63 (+0.05)
Florida: $3.82 (-0.01)
Illinois: $4.37 (+0.07)
Pennsylvania: $4.16 (+0.09)
New York: $4.12 (+0.02)
Maryland: $3.99 (+0.08)
Michigan: $4.18 (-0.08)
Texas: $3.59 (-0.04)
Georgia: $3.78 (+0.01)
On Sunday, April 23rd, there are twenty-five (25) states with average prices at or above $4.00, with twenty-three (23) below the $4 threshold, not including Hawaii ($5.44) and Alaska ($4.79), with two above $5 (California and Washington). The Southeast has maintained as the lowest region overall over the past 12 weeks as a gallon of unleaded regular is averaging below $4.00 ($3.59-3.79) in places like Tennessee, Alabama, Arkansas, Georgia, Texas, and Mississippi, with the Midwest region second, prices ranging from $3.84 to $3.98. Exceptions include Florida in the Southeast and Michigan, Wisconsin, Ohio, Iowa, and Illinois in the Midwest. Prices in the Northeast rose slightly thi week, with most states averaging above $4.00.
Rising gas prices are again becoming an issue for cash-strapped small businesses and consumers. High gas prices squeezes out everything else in terms of demand. With more states above $4.00 a gallon, the U.S. could very well see demand destruction and if demand isn't there, the only resolution is lowering prices. Food and energy remaining high strips out demand and could cause unwelcome circumstances in the U.S. market.
The concern among many experts in the field is refining capacity, especially diesel and jet fuel, as those prices have ramped up to record levels. Consumers use gasoline, but businesses rely on diesel, especially for long-haul commerce.
Bitcoin
This week: $77,297.70
Last week: $63,223.08
2 weeks ago: $65,185.72
6 months ago: $63,326.75
One year ago: $114,920.50
Five years ago: $48,915.17
Bitcoin and other cryptos got a wake up call, courtesy of Treasury Secretary Bessent's announcement of the treasury buying back more long-dated notes and bonds at a faster rate. There's a belief among crypto warriors that an imminent currency crash would automatically make bitcoin the big winner. Oddly enough, bitcoin is quoted in dollars. When bitcoin is quoted in bitcoins, maybe then it will deliver. Until that time, skeptics remain on the sidelines of the trade of the century.
Precious Metals
Gold:Silver Ratio: 66.84; last week: 67.64
Futures, per COMEX continuous contracts:
Gold price 7/24: $4,055.70
Gold price 7/31: $4,098.60
Gold price 8/7: $4,401.30
Gold price 8/14: $4,432.00
Gold price 7/17: $4,661.60
Silver price 7/24: $58.49
Silver price 7/31: $57.78
Silver price 8/7: $63.80
Silver price 8/14: $64.82
Silver price 8/21: $69.01
SPOT: (stockcharts.com)
Gold 7/24: $4,052.00
Gold 7/31: $4,042.00
Gold 8/7: $4,340.72
Gold 8/14: $4,375.15
Gold 8/21: $4,609.49
Silver 7/24: $58.19
Silver: 7/31: $57.55
Silver 8/7: $63.56
Silver 8/14: $64.68
Silver 8/21: $68.96
Gold and silver advanced for a fourth straight week, and the rally shows few signs of slowing, even in the face of high yields on long-dated treasuries. Sovereign wealth funds and central banks continue to pour into gold, now the #1 Tier-1 holding of central banks around the world, surpassing treasuries roughly a year ago, and that trend continues.
Keeping an eye on the gold:silver ratio (GSR) that continues to decline in silver's favor, the culmination of the long bull market in precious metals may send the ratio back to levels seen at the peaks for both metals, in the mid-40s, which means, if gold strikes a new high of $6,000 (a distinct possibility given current conditions) within the next 6-12 months, silver would ramp to its own all-time high of 133, or beyond.
Longer term, sending the GSR back to traditional levels of 20:1, 16:1, or even 12:1 (the U.S. standard in the constitutional era), silver's price would reflect its return as a monetary metal, a position it has claimed for thousands of years. It's only been since the mid-1900s that silver was no longer regarded as money. The United States did away with silver coinage in 1964, melted down most of the retired coins, but there still remains a robust market for "junk" 90% silver. The consideration of returning to a bi-metallic standard is no longer seen as impossible. India, Russia, and China both value silver with much more respect than their Western counterparts, and the Asian century is unfolding rapidly. These powerhouse countries are beginning to dominate trade in precious metals, the suppressive efforts of the LBMA and COMEX soon to be relegated to secondary positions as price takers, not price makers.
There's already a growing premium in Shanghai as compared to COMEX or spot pricing. Friday's reading for an ouce of silver at the SGE (Shanghai Gold Exchange) was $78.48. For an ounce of gold, the premium is smaller, about $10 higher than spot.
Over the past 30 days, gold is up 11.51%, with silver gaining a whopping 17.74% (goldprice.org). With the U.S. dollar losing value and purchasing power at an accelerating rate, many experts in the field are expecting new highs before the end of 2026.
Here are the most recent prices for common one ounce gold and silver items sold on eBay (free shipping included, numismatics excluded):
| Item/Price | Low | High | Average | Median |
| 1 oz silver coin: | 70.00 | 85.02 | 77.42 | 77.68 |
| 1 oz silver bar: | 70.00 | 85.05 | 77.43 | 77.20 |
| 1 oz gold coin: | 4778.90 | 4992.62 | 4865.71 | 4844.03 |
| 1 oz gold bar: | 4780.18 | 4845.21 | 4814.14 | 4804.29 |
The Single Ounce Silver Market Price Benchmark (SOSMPB) continued its advance for a fourth straight week, closing out at $77.43, an upside move of $1.90 per troy ounce from the August 16 price of $75.53.
WEEKEND WRAP
Even with Friday's dead-cat bounce, stocks still finished the week deep in red ink. The treasury complex is going to become the biggest story of the year if rates continue to rise. Overshadowed by the energy crunch perhaps, because more people understand the implications of $4.00 gas than a 5.35% 30-year bond, buckling in credit markets threatens everything, everywhere, from government funding to credit cards to commercial and auto loans.
In case of a credit seizure, stock up on essentials, as in fuel, food, water, and protection.
At the Close, Friday, August 21, 2026:
Dow: 53,277.01, +517.80 (+0.98%)
NASDAQ: 26,180.46, +113.29 (+0.43%)
S&P 500: 7,674.37, +33.21 (+0.43%)
NYSE Composite: 24,728.67, +180.41 (+0.73%)
For the Week:
Dow: -455.40 (-0.85%)
NASDAQ: -548.71 (-2.05%)
S&P 500: -11.39 (-1.43%)
NYSE Composite: -93.01 (-0.37%)
Dow Transports: -222.13 (-1.02%)
Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2026, Downtown Magazine Inc., all rights reserved.
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