Mark Moss - Why Bonds Are Dead & Bitcoin Is Rising

1. Fixed Income Crisis Overview

Mark highlighted the alarming reality of retirees relying on fixed income investments. For instance, a retiree with $10 million in US Treasuries would only yield $50,000 annually, which is significantly below the average income in the country. This situation underscores the deeper issues in the fixed-income market, revealing how global conditions are producing strikingly low yields, leading to a potential crisis for retirees who depend on such income.

2. Global Financial Absurdity

According to Mark, the situation is not limited to the US; it reflects a global absurdity experienced in countries like Japan and the UK. In Japan, retirees face negative yielding bonds, while in the UK, pension funds nearly collapsed during the gilt crisis in 2022. This alarming trend demonstrates a widespread problem where many governments are inadvertently setting up retirees for financial insecurity.

3. The Great Unraveling Opportunity

Mark referred to the current financial turbulence as the "great unraveling," suggesting that it marks the end of a 40-year bond market super cycle. He asserted that the unwinding of this system presents not just a crisis, but the greatest opportunity seen in generations. Investors must recognize the potential for massive capital shifts away from traditional fixed-income securities towards new solutions like Bitcoin.

4. The Underfunded Pension Crisis

A staggering $70 trillion underfunded gap exists in pension liabilities, primarily fueled by the inability to achieve necessary yields. Mark stressed that pension funds and insurance companies are in dire need of income-generating assets to fulfill obligations to retirees. This gap highlights an urgent need for innovative financial instruments that can provide reliable income while compensating for traditional bond shortcomings.

5. Financial Repression Playbook

Mark directly referenced a playbook utilized by governments to deal with overwhelming debt, framed as financial repression. He noted that this has historically involved keeping interest rates below inflation to slowly liquidate government debt. Retirees and pensioners should be aware of this strategy, as it could diminish their wealth over time while governments manage their finances.

6. Shifting the Financial Bedrock

Mark emphasized that a significant transformation is underway in global finance, where Bitcoin could replace traditional fixed income as the bedrock of the system. He posited that Bitcoin is unconfiscatable and censorship-resistant, making it an attractive alternative for yield-seeking investors. This shift could redefine the landscape of financial instruments available to retirees and financial institutions.