Sorry for the compound-sentence question.
The first part is in reference to this story which I’ve seen in a few different publications now.
Today, I happened to look up the price of Bitcoin (because it was relevant to a conversation I was having) and found it had shot up recently and was now at about $77,400 (up from the $63,000 when I last checked). Doing a little bit of searching, it seemed like the reason was the bond buyback.
(Sorry also for the sensationalistic hype article. I’m about as critical of blockchain snake oil as anyone can be. But I didn’t find a better article about why it affected the price of Bitcoin.)
My questions are, in simple terms:
- Is it roughly correct that buying a U.S. Treasury bond is loaning the U.S. money?
- And that this story about bonds is basically saying that the U.S. government is “working on paying off its debts” (to bond holders)?
- How is the interest rate on bonds decided?
- What are bond “yields” exactly? (Is that just the same as the interest rate on bonds?)
- Why are yields skyrocketing?
- What reason does the treasury secretary give for buying back bonds?
- Are there probable hidden ulterior motives for doing so? If so, what are they?
- It seems like the idea to buy back bonds came from the White House, so this is probably a MAGA thing, yes? (Or is it more bipartisan than that?)
- Who (if anyone) thinks the buyback is a bad idea and why?
- Why are the blockchain bros so excited? What do they think this has to do with cryptocurrencies?
Thank you in advance, people! I like to think I know a fair amount about a fair amount, but finance (let alone fake blockchain Libertarian fairy tail finance) definitely isn’t my strong suit, and I’m curious to know more about the dynamics at play here and where they’re likely to lead.