Following the announcement by the United States Department of the Treasury of an upward adjustment in the scale of long-term liquidity support for buy-backs, Robert Kiyozaki, author of The Poor and Rich Dad, again criticized the dollar system, stating that Washington was creating more “false dollars”. His statement has also drawn the market's attention back to dollar debt, inflation and bitcoin to avoid risky narratives.

This adjustment is not a quantitative easing by the Fed. The approach of the Ministry of Finance is to replace issued State debt with a buy-back operation to improve market liquidity for long-term vouchers. However, the policy was introduced at a more sensitive time: the United States long-term national debt return had recently risen to a high level since 2007, and federal debt had surpassed $40 trillion.

Increase in the scale of long-term national debt buy-backs

Under the United States Treasury Department arrangement, the single-liquidity support buy-back cap of 10 to 20 and 20 to 30-year-old sovereign debt would increase from $2 billion to at least $4 billion. The new arrangement will enter into force on 9 September and will continue until the end of the current refinancing quarter on 4 November.

According to the Ministry of Finance, the increase in the scale of buy-backs was intended to improve the liquidity of long-term public debt transactions. Officials stated that there was a high level of business participation between the periods, and that there was a need to increase operational capacity. By official definition, such buy-backs would not directly expand the monetary base as the Fed ' s quantitative easing.

  • 10 to 30 years for this refocus
  • The single buyback cap was raised from 2 billion to at least $4 billion.
  • The implementation window is from 9 September to 4 November

Kiyozaki continues to bet on scarce assets.

It was interpreted in the context of a larger devaluation. He has long argued that, at a time of rising government debt and inflationary pressure, the purchasing power of cash would be weakened, and that investors should focus more on relatively restricted assets such as gold, silver, bitcoin and some real estate.

Following an adjustment announced by the Ministry of Finance, the rate of return on bonds fell and the United States dollar weakened. Bitcoin, for its part, synchronized its rebound, having recovered from the vicinity of about $65,000 within the week and at one point approaching $79,000. The recent rebound of bitcoin was also driven by, among other things, the inflow of ETF funds and the fallback.

The core view of Kiyozaki is not to equate repurchases by the Ministry of Finance directly with quantitative easing, but rather to suggest that, as long as Governments continue to ease debt market pressure in various ways, markets are more inclined to allocate limited assets. The total amount of bitcoin is capped at 21 million, which is an important reason for its long-standing perception by some investors as an anti-inflation tool.

Markets still focus on debt and yield

On a scale, the Treasury's operations were still limited compared to the entire United States Treasury debt market, more like a liquidity management tool in the short term than a monetary policy shift to a signal. But the real concern of the market remains whether the continued need for debt in the United States will continue to push up long-term financing costs.

If the long-term rate of return is maintained at a high level and fiscal pressures continue to accumulate, the narratives surrounding transactions that “weak dollar purchasing power and benefit from scarce assets” may continue. In the case of bitcoin, this means that the price drivers are still not only from the encryption industry itself, but are also increasingly influenced by macro-interest rates, dollar movements and financial flows.