US Bonds Hit 5.16%, Diesel Prices Soar: A Perfect Storm
US 10-year bond yields surge to 5.16%, diesel prices remain high, and China adds 1,000 tons of gold to its reserves. Economic alarms are sounding.
English · Original discussion in Spanish · Published
US Bonds at 5.16% and Soaring Diesel Prices Sound All Alarms
Autumn 2026. The US debt market has stopped behaving like a market and is now functioning as a panic thermometer. The yield on the 10-year bond has skyrocketed to 5.16% (+99 basis points year-to-date), the 30-year is trading at 5.348%, and the 2-year has risen 138 basis points. Translated: someone is selling US debt hand over fist, and no one seems willing to curb the price demanded to finance the US Treasury. The snapshot is grim; the movie, worse.
10-Year Bond at 5.16%: Selling US Debt No Longer Scares Anyone
In the past week observed in the markets, 10-year Italian bonds rose 8 basis points to 4.51%, Greek bonds to 4.38%, Spanish bonds to 4.08%, and the German Bund to 3.60%. All of Europe is tensing up simultaneously. The US 3-month held at 4.068%, but the long end of the curve screams what the short end tries to hide.
The Chairman of the Federal Reserve, Kevin Warsh, has acknowledged as close as one can get without saying it directly: if core inflation does not return to 2%, rates will have to be raised. Short-term bonds reacted with strong sell-offs. The ICE BofA MOVE fixed income volatility index surged 29.69% in one week, the largest jump since April.
Diesel is the Backbone, Not Crude Oil
While half the world watches crude oil prices, the real bottleneck is one step lower. 80% of US freight by weight, a significant portion of global maritime trade, agriculture, and mining depend on diesel. In 2025, the US exported 1.26 million barrels per day, 15.4% of global exports; together with Russia, they account for almost a quarter of the total.
The discussion points to the destruction of refineries in Russia and the Middle East due to the wars in Ukraine and Iran, which has overloaded refineries elsewhere. These are extending maintenance shutdowns to avoid halting production. The paradox being discussed: if the price rises, why consider banning exports instead of selling all the expensive surplus? A refinery won't stop if it can sell its barrels to the highest bidder. The Bloomberg Commodity Index reached a three-month high.
Why is China Importing 1,000 Tons of Gold?
The other silent movement is in precious metals. China spent 158.8 billion dollars on 886 tons of gold during 2025, and this year has surpassed 1,000 tons imported, in addition to producing 384 tons domestically. The People's Bank is moving reserves from London to Hong Kong. According to Bloomberg, anonymous officials describe a long-term repatriation trend.
Gold now represents 27% of global reserves, ahead of 22% in Treasury bonds and 15% in the Euro. Basel III elevated it to a Tier 1 asset. And US reserves continue to be accounted for at 42.22 dollars per ounce since 1973: a revaluation to market value would add 1.13 trillion dollars to the balance sheet, as highlighted. In the week Bessent announced doubling bond buybacks, gold rose 4.2% and silver 5.7%.
Tech Companies' Hidden Debt: $1.65 Trillion
Another ticking time bomb. Alphabet, Amazon, Meta, Microsoft, and Oracle have accumulated hidden debt of 1.65 trillion dollars, an eightfold increase in four years, according to their own financial statements. The tech giants have issued residual value guarantees of up to 300 billion to back data centers and AI chips, recording minimal exposure on their balance sheets. Some in the debate argue that Japanese banks are exposed to these investments, and the yen is not recovering. Chinese AI, with DeepSeek charging a fraction of a cent per million tokens, is pressuring prices downward.
Trump and the Daily Market Manipulation
And at the center of it all, a president who, in his last press conference, did not stop referring to the stock market. The manufacturing sector numbers being reviewed do not support him: down from 8.47% in 2017 to 7.92% in June 2026, with 95,000 net jobs lost between 2025 and 2026 despite tariffs. Some argue that Trump monetizes his ability to move the market by pre-selling his social media messages to investors for $100,000 per month.
The end is not in sight. US debt continues to be placed at rates unthinkable two years ago, diesel prices are not falling, gold is not stopping, and the Federal Reserve admits it may have to tighten further. With these ingredients, and with some already seeing the 10-year at 6%, it ceases to seem like an exaggeration. And no one is talking about this in the press conferences.
Autumn 2026. The US debt market has stopped behaving like a market and is now functioning as a panic thermometer. The yield on the 10-year bond has skyrocketed to 5.16% (+99 basis points year-to-date), the 30-year is trading at 5.348%, and the 2-year has risen 138 basis points. Translated: someone is selling US debt hand over fist, and no one seems willing to curb the price demanded to finance the US Treasury. The snapshot is grim; the movie, worse.
10-Year Bond at 5.16%: Selling US Debt No Longer Scares Anyone
In the past week observed in the markets, 10-year Italian bonds rose 8 basis points to 4.51%, Greek bonds to 4.38%, Spanish bonds to 4.08%, and the German Bund to 3.60%. All of Europe is tensing up simultaneously. The US 3-month held at 4.068%, but the long end of the curve screams what the short end tries to hide.
The Chairman of the Federal Reserve, Kevin Warsh, has acknowledged as close as one can get without saying it directly: if core inflation does not return to 2%, rates will have to be raised. Short-term bonds reacted with strong sell-offs. The ICE BofA MOVE fixed income volatility index surged 29.69% in one week, the largest jump since April.
Diesel is the Backbone, Not Crude Oil
While half the world watches crude oil prices, the real bottleneck is one step lower. 80% of US freight by weight, a significant portion of global maritime trade, agriculture, and mining depend on diesel. In 2025, the US exported 1.26 million barrels per day, 15.4% of global exports; together with Russia, they account for almost a quarter of the total.
The discussion points to the destruction of refineries in Russia and the Middle East due to the wars in Ukraine and Iran, which has overloaded refineries elsewhere. These are extending maintenance shutdowns to avoid halting production. The paradox being discussed: if the price rises, why consider banning exports instead of selling all the expensive surplus? A refinery won't stop if it can sell its barrels to the highest bidder. The Bloomberg Commodity Index reached a three-month high.
Why is China Importing 1,000 Tons of Gold?
The other silent movement is in precious metals. China spent 158.8 billion dollars on 886 tons of gold during 2025, and this year has surpassed 1,000 tons imported, in addition to producing 384 tons domestically. The People's Bank is moving reserves from London to Hong Kong. According to Bloomberg, anonymous officials describe a long-term repatriation trend.
Gold now represents 27% of global reserves, ahead of 22% in Treasury bonds and 15% in the Euro. Basel III elevated it to a Tier 1 asset. And US reserves continue to be accounted for at 42.22 dollars per ounce since 1973: a revaluation to market value would add 1.13 trillion dollars to the balance sheet, as highlighted. In the week Bessent announced doubling bond buybacks, gold rose 4.2% and silver 5.7%.
Tech Companies' Hidden Debt: $1.65 Trillion
Another ticking time bomb. Alphabet, Amazon, Meta, Microsoft, and Oracle have accumulated hidden debt of 1.65 trillion dollars, an eightfold increase in four years, according to their own financial statements. The tech giants have issued residual value guarantees of up to 300 billion to back data centers and AI chips, recording minimal exposure on their balance sheets. Some in the debate argue that Japanese banks are exposed to these investments, and the yen is not recovering. Chinese AI, with DeepSeek charging a fraction of a cent per million tokens, is pressuring prices downward.
Trump and the Daily Market Manipulation
And at the center of it all, a president who, in his last press conference, did not stop referring to the stock market. The manufacturing sector numbers being reviewed do not support him: down from 8.47% in 2017 to 7.92% in June 2026, with 95,000 net jobs lost between 2025 and 2026 despite tariffs. Some argue that Trump monetizes his ability to move the market by pre-selling his social media messages to investors for $100,000 per month.
The end is not in sight. US debt continues to be placed at rates unthinkable two years ago, diesel prices are not falling, gold is not stopping, and the Federal Reserve admits it may have to tighten further. With these ingredients, and with some already seeing the 10-year at 6%, it ceases to seem like an exaggeration. And no one is talking about this in the press conferences.
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (1006 replies).
More summaries
-
Oil Heads Towards $120: China Returns and US Reserves Drop
Crude for immediate delivery commands a premium of up to $15 over six-month contracts: China is buying again, US reserves fall to 40%, and the target...
-
Momentum Financial: The Podcast Diving into Value Investing
Momentum Financial transformed from a hobby among enthusiasts into a benchmark for Spanish value investing, analyzing Kistos, Chinese stocks, and 'fakeflation'.
-
Gold stuck at 0.382 as bitcoin takes the spotlight
Gold stuck at 0.382 and unable to recover while bitcoin hits 6.000 dollars; thresholds at 1.250 and 1.050 set the scene.
-
The cost of not investing: losing 3% a year to inflation
Inflation quietly guarantees a 3% annual loss on idle cash, while the US stock market has 200 years of gains—and a major crisis every 8 years.
-
Extra virgin olive oil falls to €6.35 a litre at Mercadona
Extra virgin olive oil is now €6.35/litre at Mercadona, down from €6.75 months ago, while the origin price of picual is €4.143/kg
-
BIG offers 4% TAE on 6-month deposit with Spanish IBAN and Portuguese FGD
BIG launched a 4% TAE six-month and 3.5% three-month deposit in May 2023 with Spanish IBAN and Portuguese FGD, but later cut rates and had opening delays.