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Monday morning, 11 a.m. I'm scrolling X between calls, and a post from a gold analyst stops my scroll.
He'd posted a screenshot of Treasury yields. The 10-year at 5.22%. The 30-year at 5.52%. Every line on the board was green, which in the world of bonds means prices are falling and borrowing costs are rising. The 10-year hasn't been this high since 2007. The 30-year, not since 2004.
His point was simple. Washington owes more than $40 trillion. At these rates, the interest bill keeps climbing toward $2 trillion a year. The government can't let that run forever. So first the Treasury steps in, then the Fed steps in, and the Fed steps in by creating money. Buy hard assets, he says, because the printing press is coming.
I'll be honest. My first reaction was, "Yes. Exactly." I've said versions of this for years. Inflation spikes, assets rise, and the people who own things come out ahead of the people who save money.
But that 2007 number stuck with me. The last time the 10-year sat this high, I was sitting across a table from two guys buying a fourplex.
It was 2006. They were using a no-doc loan, the kind where nobody checked income. 0% down payment. I ran the numbers and didn't like what I saw. So I looked up and said, "You guys realize the cash flow doesn't work on this property, right?"
I was trying to talk them out of it. They smiled at me like I didn't get it. "No, you don't understand," one of them said. "This is a pure appreciation play."
And in 2006, that sounded reasonable. Prices had gone up every year. Everyone assumed they always would. Then they didn't. I'd bet everything I own that those two men don't own that fourplex today. The market wiped them out, and it didn't take long.
They weren't dumb. They were early to a story everybody believed, and they had no way to survive the next chapter that nobody saw coming.
That's why I dug into this bond market instead of just cheering. And I think the gold analyst is right about the destination and wrong about the timing. That difference matters a lot for your money.
Here's what's actually happening. The Treasury is already stepping in. It has tripled the size of its long-bond buybacks to push rates down. That tells you Washington sees the problem. But those buybacks aren't printing money. The Treasury pays for them by borrowing somewhere else. It's a swap, not a rescue, and it's tiny next to a $30 trillion market.
And the Fed? It just raised rates for the first time since 2023. It's taking the opposite direction from the printing press, at least for now.
One more clue. If investors expected runaway inflation, you'd see it in the inflation-protected bond market. You don't. The market still prices inflation near 2.3% a year. What investors want is a bigger reward for lending to a government this deep in debt. That's not an inflation signal. It's a trust signal.
So when does the Fed print? History says after something breaks. A failed auction. A panic in credit. A bond market that stops working. That's what happened in 2020, and it's what happened in England in 2022. The rescue comes after the damage, not before it.
That means the order of events probably looks like this. First, pain. Rates stay high, mortgages stay above 7%, and assets are under pressure. Then the break. Then the rescue, and the reflation everybody on X is waiting for.
The people who win this cycle aren't the ones who called it first. They're the ones still standing when the rescue arrives. My two fourplex buyers called appreciation correctly over the long run. Prices came back. They just weren't around to collect.
If you're a high earner in your 50s, your paycheck becomes your greatest weapon. You don't need to predict the break. You need to survive it with room to act. That means three things.
Buy on cash flow at today's rates. If a property only works when rates drop or prices climb, it doesn't work. Think of all the apartment syndicators who bought in 2021 at a 3 cap. They are all either holding onto a property that does not cash flow, or are already facing foreclosure. Let the rescue be your bonus, not your plan.
Lock in fixed-rate debt, and understand why it works. I tell clients this all the time. A house and the land under it aren't really worth more today than they were 10 or 25 years ago. It's the same dirt and the same roof. What changed is the dollar. It buys less every year, so it takes more dollars to buy the same house. Even at the 2.3% inflation the bond market expects today, prices double in about 30 years. If you own the asset, that's good news. Your house holds its value in shrinking dollars, and so does the rent you collect. Meanwhile, your fixed-rate loan stays exactly the same payment. You pay it back with cheaper dollars every year. That's how an owner uses inflation instead of fearing it.
Keep your reserves deep. The next 12 to 18 months may bring you sellers who can't wait. You want to be the buyer who can solve their problem.
This is the whole shift from Earner to Owner. The earner watches the 10-year and worries. The owner watches the 10-year and gets ready.
The printing press is probably coming. Just make sure you're standing when it does.
You made the money. Now make it count.
Your I’m Still Standin’ Banker,
Jim
About Asset Accelerator
I'm Jim Duffy. For 25 years I've sat across the closing table from families who looked successful on paper but just weren't building anything that would last. I started Asset Accelerator to change that, one reader at a time. My wife Lisa and I are walking this same road ourselves, from earning to owning, and every week I share what actually works. No hype, no gurus, just real numbers and the belief that it's never too late to start. Let's build something that pays you for life.
