A Tipping Point? US Treasurys Are No Longer The 'Reserve Asset Of Choice' | David Hay

**Adam Taggart** (0:00)
All right, and we should be live. Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. Welcome you here for one of our Wednesday live streams. This time, it is with David Hay, returning with his monthly macro and markets outlook. David, how are you doing?

**David Hay** (0:18)
Good, Adam. How about yourself?

**Adam Taggart** (0:22)
And you know, David, pardon me?

**David Hay** (0:26)
California tax police are not hot on your trail now that you're back in the state briefly?

**Adam Taggart** (0:32)
Hopefully not. Yeah, David, folks, David's referring obviously to my move to Nevada. Yeah, hopefully I've got nothing to do with California tax police from here or ever, David, and hopefully they're not listening. But if you are folks, nothing to see. All right, well, look, lots to talk about this month, a lot going on. David, as usual, has prepared an excellent slide deck for us, which I'll get to in just a second. Just as a heads up, folks, as we did last time, we will be doing an outlook, David's outlook for the current landscape in the month ahead, and then we'll end, and then David and I will record a retroactive of the past couple of weeks of some of the most meaningful interviews that have happened on Thoughtful Money that have caught each of our attentions. And that second video will be available to members of this YouTube channel and premium subscribers to the Thoughtful Money sub stack. So just a reminder again, as we did last time, we're going to do the part one first, which will be available to everybody, and then we'll hop off and we'll record the part two, which will be available just to those audiences. But David, a lot going on here, and look, maybe we can get pretty much straight to your slides, but there was a key slide in there that I made the theme for this discussion, which is that it seems that we are at a tipping point here, where US. Treasuries are no longer the reserve asset of choice, and that potentially has a lot of ramifications, and clearly, it's got one for gold. So I'm sure we'll get to that quickly. But anything you want to say before I bring the slide deck up?

**David Hay** (2:15)
Well, just to reinforce what you said, I did a webinar yesterday with my great friend Grant Williams, and that was one of the hot topics that he and I both agreed with. So there was not an opinion exchange. But the idea that the dollar is very much the world's reserve currency. So that hasn't changed. But what has changed is US. Treasuries are no longer the reserve asset of choice among central banks, global central banks. And that's profoundly important. And I think that's the main reason that we're seeing gold knocking on the door of 4,000. Okay.

**Adam Taggart** (2:52)
And I only had a moment to slip through your slides. So I don't know if this chart is in there, but I have seen a slide recently that shows percent of assets held by central banks. And we have just crossed where gold is a percentage of central bank balance sheets has just poked above treasuries, which had been in decline. So to your point, yeah, dollars still the world reserve currency. But in terms of the dominant asset on central bank balance sheets, it seems gold has now just nudged out to treasury, which isn't the first time in history that's happened, but it's the first time in a long time.

**David Hay** (3:26)
All right.

**Adam Taggart** (3:27)
Well, why don't we, without further ado, get to your slides here, David? So I'll drive for you. So you just tell me when you want me to advance.

**David Hay** (3:36)
I like this. I like driving Ms. Daisy.

**Adam Taggart** (3:41)
Driving Mr. Hay, Dr. Hay. All right. Well, why don't we start here with your uber bullish zeitgeist quote?

**David Hay** (3:54)
Sure. Yeah. Are you moving it? Because I'm moving on my end, but I can stay up with you. Okay.

**Adam Taggart** (4:02)
So we are here on slide two.

**David Hay** (4:05)
All right. And this is a quote from Andrew Tyler, JPMorgan, which I just thought was a great summation of this attitude that the stocks can really only go up unless there's an asteroid that hits the earth. And I think when you get to that kind of a scenario, you know that you're just in absolutely super rarefied air when it comes to a bull market, almost without precedence. In fact, I'm going to make the case with some of these that it is without precedence. It really has taken out the biggest equity bubble the US market has ever seen, which was in 1929 It was the late 90s tech bubble. So the basic point here is that, so that's, and that doesn't mean it's going to add. I mean, that's, I guess, you know, Adam, just as this is a completely off the cuff line, but one that I think I've conveyed to you before, and I think it's so important when you do these kinds of events, where there's a tendency for us to be who are on screen, and, you know, we've been doing this for a long time, like 46 years of the financial industry. But I haven't ever seen a set of circumstances like this. So my outlook, my, you know, my anticipations, if you will, not forecast, but anticipations are very cloudy and should be taken with, not just a pinch of salt, but a whole shaker of salt.