On September 16, Kevin Warsh walked into his press conference, looked at the cameras and said the sentence no Fed chair had needed to say in three years: "Inflation is too high and has been for too long." Then he did something about it. The Federal Reserve raised its benchmark rate by a quarter point to a range of 3.75% to 4.00% — its first hike since 2023 — and the vote was 12-0.

Most people read that as a routine policy move. It isn't. I want you to understand exactly who is on the other side of this trade — because it's the U.S. Treasury, and it owes $40 trillion.

Here's the idea. When a household with a big mortgage sees rates rise, it cuts spending. When the U.S. government sees rates rise, it borrows more to pay the interest — and then pays interest on that, too. Washington is still running deficits of roughly $2 trillion a year, and every dollar of that has to be sold to investors who now want more for the privilege.

They're getting it. The 10-year Treasury yield sits at 5.18% this morning, after a three-day sell-off that pushed it to around 5.20% — the highest levels since 2007. Keep in mind: in February, the Congressional Budget Office built its entire 10-year budget forecast on the 10-year yield averaging 4.1% this year. The market has already blown through that number by more than a full percentage point.

Think about what that means. If yields stay 80 basis points or more above the CBO's baseline, annual interest payments could reach $2.7 trillion by the end of the decade — more than the government spends on Medicare, and more than it pays in Social Security retirement benefits. Maya MacGuineas, who runs the Committee for a Responsible Federal Budget, put it plainly: "If interest begets debt, and debt begets interest, eventually debt will spin out of control. A fiscal crisis, once unthinkable, is now a distinct possibility."

And the Fed isn't done. Sixteen of the 19 officials on the rate-setting committee expect at least one more hike before year-end. Markets now put the odds of another quarter-point increase at the next meeting at roughly 70%. The Fed's own projections show headline inflation — measured by the personal consumption price index — finishing 2026 at 3.7%, with no return to the 2% target until 2029.

So why does this matter to you? Because the Fed is doing the right thing for inflation and the wrong thing for the government's balance sheet — at the same time. Raising rates into a debt load this size is like dropping Mentos into a can of Diet Coke. You know roughly what happens next. You just don't know the exact second.

Ed Yardeni, a Wall Street veteran who spent years calling the debt worriers alarmist, now says he's "starting to worry" the 10-year "may be on the verge of breaking out above 5.00%." Jared Bernstein, who chaired President Biden's Council of Economic Advisers, went further: "Even though I can't tell you the day and time when the fire will ignite, I can tell you that we're getting closer."

When the establishment economists on both sides start saying the same thing, pay attention.

If you own long-dated Treasury bonds, I urge you to shorten your maturities. As Buffett likes to say, only when the tide goes out do you discover who's been swimming naked — and the tide is going out on 30 years of cheap money.

These debts will never be repaid. Plan accordingly.

Since Feb 28th, the S&P has slid -4.1%.

But the people invested in the Patriot Income Plan (P.I.P.)...

They barely noticed.

While the world panicked over "World War III"

Their distributions kept arriving. On schedule. In full. Some have collected 15+ separate payouts during the three months of war.

And their portfolios? The average partnership inside P.I.P. has gained 7.2% during this conflict. The best performer rose 15.3%.

That's the difference between owning stocks and owning infrastructure.

Stocks trade on fear. Infrastructure collects fees on every molecule of oil and gas that moves through America, war or peace, boom or bust.

And that's exactly what P.I.P. is.

A way for you to own critical infrastructure that pays you whether America is at war or not.

With unit prices cooling from wartime highs, today may be the best entry point in months. The next P.I.P. payout is days away.

Enroll now, before it's issued.

P.S. Since 2020, the average partnership in P.I.P. has produced 20% avg. annual gains. That's in addition to the 10% yield. One investor already collects $4,800 a month. Another hasn't worked in years. Show me something better. I'll wait. [Enroll in P.I.P. →]

Xi Jinping got a state dinner, a ceremonial welcome with nearly 500 military personnel, and the first Chinese state visit to the U.S. in 11 years. Washington got two more months.

That's the deal. Treasury Secretary Scott Bessent confirmed Thursday that the U.S.-China trade truce, which was set to expire in November, "now runs to January 10." Tariffs stay at their reduced levels until then — Chinese goods still face roughly 36.5% on average — but nothing permanent was settled on tariffs, technology curbs or rare earths.

In other words, China kept its leverage and the U.S. kept its deadline.

The data tells you why Beijing is in no hurry. A September 22 trade report from the Silverado Policy Accelerator shows China's rare earth exports to the U.S. fell in August and remain well below where they were before Beijing's April 2025 controls. Japan has received zero shipments for three straight months. South Korea, meanwhile, is getting more than its historical share. China processes roughly 90% of the world's rare earths — and it is choosing, country by country, who gets fed.

Rare earth deliveries are "falling short" of what Beijing promised in the original truce. China has met its 25-million-ton soybean commitment, but it's lagging on some $17 billion in other farm purchases. Beijing delivers on the promises that cost it nothing and slow-walks the one that gives it power.

Phillippe Le Corre of ESSEC Business School noticed the pattern: "The extensions are getting shorter and shorter." Einar Tangen of the Centre for International Governance Innovation summed up the whole relationship in six words: "Washington is hostile, but it is hooked."

Most investors will read "truce extended" and relax. That's a mistake. A two-month truce puts the next cliff on January 10 — right in the middle of the Fed's tightening cycle and just weeks after the APEC summit in Shenzhen.

If you own companies that depend on Chinese magnets or processed rare earths, assume supply stays rationed. If you own the handful of non-Chinese producers and processors, you own the only thing in this negotiation Washington can't print.

The world's swing producer has lost its swing.

Saudi Arabia pumped just 6.2 million barrels a day in August — down 23% in a single month and the lowest output since 1990. Exports fell to about 3.1 million barrels a day, from 5.1 million in July. That's the lowest since at least 2013.

The reason is geography. With the Strait of Hormuz effectively closed — shipping trackers recorded a single transit on September 20, against a pre-war norm of about 85 a day — Riyadh's escape route was the East-West pipeline to Yanbu on the Red Sea. That pipeline normally moves up to 7 million barrels a day across 1,200 kilometers. On September 11, drones launched from Iraq knocked 4 to 5 million barrels a day of it offline, and industry analysts say full repairs could take six weeks or more because pump stations were destroyed. Then, on September 18 and 19, the Houthis fired cruise missiles, ballistic missiles and drones at Riyadh and at Aramco facilities in Yanbu itself.

So Saudi Arabia is now doing something almost comical for the world's largest oil exporter — piping crude to Ras Tanura, loading it on smaller vessels, sneaking it to the Gulf of Oman, and transferring it to big tankers bound for China and South Korea.

WTI trades at $92.53 this morning, down 2.2% on reports that U.S. and Iranian negotiators are exploring a phased reopening of Hormuz. Brent traded above $104 on Thursday. Iran's foreign minister, Abbas Araghchi, met mediators at the UN General Assembly on Tuesday opposite Steve Witkoff and Jared Kushner, and Tehran says it could reopen the strait within seven days if Washington lifts its naval blockade of Iranian ports.

Keep in mind: even if Hormuz opens tomorrow, the Saudi pipeline doesn't fix itself tomorrow. The physical damage outlasts the diplomatic headline.

If you're waiting for $70 oil to come back before you buy energy, you're waiting for a world that no longer exists.

Nvidia is locked out of China. DeepSeek has decided it doesn't care.

The Chinese lab that shocked Silicon Valley last year is training a 2-trillion-parameter model now, with an 8-trillion-parameter successor planned — and it intends to build the next one on Huawei's Ascend 950 chips rather than Nvidia's. The Information reports DeepSeek will need roughly 200,000 Huawei chips to do what about 50,000 Nvidia chips could — four times the hardware for the same job. It's spending an estimated $4.5 billion on computing infrastructure and is seeking funding at a $74 billion valuation.

Let me put this in plain English. U.S. export controls were designed to make Chinese AI slower. They're making it less efficient — and completely independent. Every Ascend chip DeepSeek buys is a chip Huawei learns from, and a customer Nvidia will never win back.

And DeepSeek isn't alone. Alibaba's Qwen 3.8 Max already runs at 2.4 trillion parameters, and Moonshot AI's Kimi K3 at 2.8 trillion. China's frontier labs are scaling up on domestic hardware at the same moment technology curbs sit unresolved on the Trump-Xi table. Four times the chips is expensive — but Beijing has decided that expensive and sovereign beats cheap and dependent. That's the same logic the U.S. is now applying to magnets and processed minerals, just running in the opposite direction.

The Information calls the break from Nvidia one of DeepSeek's biggest strategic bets — "one that simply must succeed." When a company's strategy reads like that, it has already burned the boats.

That's why Beijing confirmed Thursday that the first U.S.-China talks on artificial intelligence have taken place, with a "notification mechanism" for AI incidents on the summit agenda. Two countries don't set up a crisis hotline for a race one of them is losing badly.

If you own AI infrastructure stocks on the assumption that America's chip lead is permanent, I'd stress-test that assumption before the market does it for you.

In January, gold hit an all-time high of $5,608 an ounce. This morning it trades at $4,302. Silver has done worse — from $121.64 in January to $63.75 today, nearly cut in half.

Think about that. A shooting war has closed the Strait of Hormuz for months. Saudi oil output is back to 1990 levels. The U.S. Treasury owes $40 trillion and is borrowing at the highest rates since 2007. And the classic crisis asset is down 23% from its peak.

Most people will look at that and conclude gold "doesn't work." They're wrong. What you're seeing is the one thing that has always beaten gold in the short run: a central bank willing to raise rates. When the Fed hikes and the dollar climbs to a two-month high, an asset that pays no interest looks expensive next to a Treasury yielding 5%. That's all this is.

Here's what matters — three things.

First, the buyers who matter haven't left. Central banks are still adding roughly 70 tons a month, and gold ETFs have taken in about 6.3 million ounces since July. Ryan McKay, senior commodity strategist at TD Securities, says flatly: "It's time for gold to enter its next bull run," with a path above $5,000 by 2027. Institutions sell on rate headlines. Sovereigns buy on debt math.

Second, the Fed's hiking cycle has a ceiling, and the Treasury's interest bill sets it. Every quarter-point hike adds to deficits that already run $2 trillion a year. At some point — and I believe it arrives faster than consensus expects — the Fed will be forced to choose between its inflation target and the government's solvency. When a government owes this much, the debt wins that argument.

Third, the hard-asset trade is broader than gold. Copper sits at $6.71 a pound, up 42% in a year, because Sprott Asset Management now expects global mined copper production to fall this year for the first time since 2017 — and demand from power grids, AI data centers and defense keeps climbing. The metals that build things are telling you the same story the metals that store value will tell you later.

Sir John Templeton said the time of maximum pessimism is the best time to buy. Maximum pessimism in gold isn't when the price is falling during a war. It's when the rate-hike story is so obvious that nobody questions it.

If you don't own gold, I urge you to begin building a position into this weakness. If you already own it, don't sell your insurance because the house hasn't burned down this month.

I've given you the answer. Horse, meet water.

Markets see roughly a 70% chance of another quarter-point hike at the next meeting. If you see the 10-year break decisively above 5.20% before then, expect the "fiscal crisis" talk to move from think tanks to trading desks.

The U.S.-China truce now ends January 10, 2027. If you hold companies exposed to Chinese rare earths, circle the November APEC summit in Shenzhen — that's where the terms of the next extension will get set.

Saudi Arabia's East-West pipeline was knocked offline on September 11, and repairs could take six weeks or more. If you're trading oil on Hormuz headlines alone, watch the pipeline restart date — it tells you how much Saudi crude can actually move.

Tehran says it could reopen Hormuz within a week if the U.S. lifts its naval blockade. If a phased deal lands, expect a sharp oil sell-off — and a sharp rebound if the Houthis keep hitting the Red Sea side.

Union workers at the world's largest copper mine, in Chile, are threatening to strike after rejecting a wage offer. With mined supply already shrinking, a walkout there would hit a market that has no slack left.