🟢 [E8456] Gromen frames US-China dynamics as economic war where the US fiscal position will 'likely implode before China' given twin deficits, open capital account, and 10y rates ~200bp above China's. References potential 'San Francisco Accord' for coordinated USD weakening, suggesting erosion of US financial hegemony and shift toward managed dollar depreciation.

🟢 [E8454] Record tail on 20y UST auction despite stable DXY suggests further dollar weakness needed for Treasury market stability. Gromen references a potential 'San Francisco Accord' for coordinated USD weakening with China, and argues the US fiscal position (twin deficits, open capital account, 10y rates ~200bp above China's) structurally requires dollar depreciation.

🟢 [E8448] Weak 20-year UST auction on 2024-02-23 produced a record tail despite stable DXY, signaling UST market dysfunction. Gromen argues this indicates further dollar weakness is needed for Treasury market stability, and that the Fed will be forced to prioritize UST market function over inflation containment, effectively confirming fiscal dominance dynamics.

🟢 [E8451] Supercore inflation has accelerated for three consecutive months while financial conditions remain extremely loose. Gromen argues the Fed will nonetheless abandon inflation fighting to prevent UST market failure and bank crises, implying structurally higher inflation as the cost of maintaining financial system stability under fiscal dominance.

💬 [E8458] Gromen recommends being long equities relative to long-term Treasuries, specifically SPX/TLT and S5INDU/TLT ratios. Urges investors to deploy cash and move long-term UST holdings into these ratio trades, arguing that under fiscal dominance any bond market dysfunction accelerates rather than impedes equity outperformance versus bonds.

💬 [E8460] Gromen references US industrial policy implementation accelerating through 2024 regardless of election outcome, and highlights S5INDU/TLT (S&P 500 Industrials vs long-term Treasuries) as a key recommended ratio trade, suggesting structural tailwinds for industrial and energy-adjacent sectors from reshoring and fiscal spending.

🟢 [E8452] Gromen is emphatically bullish on GLD/TLT ratio, urging investors to move long-term UST holdings into gold. Notes that gold 'should have gotten killed' on the ugly 20y UST auction but did not, calling this an important signpost. Fed pivot to financial stability over inflation means structural gold outperformance vs long-duration Treasuries.

💬 [E8459] CRE bad loans at major US banks now exceed loss reserves, creating potential contagion risk. Gromen argues the Fed will respond by choosing financial stability over inflation mandate for TBTF institutions, effectively socializing CRE losses through monetary accommodation rather than allowing credit stress to cascade through the banking system.

🟢 [E8449] Gromen argues that in fiscal dominance, bond market cracking is now a BULLISH catalyst for risk assets because it forces immediate Fed intervention with more USD liquidity. The new regime rule is that Treasury dysfunction triggers policy response (more liquidity), not tightening, fundamentally shifting the transmission mechanism for risk assets.

🟢 [E8450] Major US TBTF banks (JPM, BAC, WFC, C, GS, MS) now have CRE bad loans exceeding loss reserves. Gromen contends the Fed must choose between supporting these banks or maintaining inflation mandate, and will choose banks, effectively subordinating inflation fighting to financial stability for systemically important institutions.

🔴 [E8453] Gromen is bullish BTC/TLT, noting Bitcoin should have gotten killed on the ugly 20y UST auction but did not, calling this an important signpost. Recommends deploying cash and long-term UST holdings into BTC/TLT ratio trades, suggesting Bitcoin benefits from fiscal dominance and Fed prioritizing financial stability over inflation.

🟢 [E8457] Gromen identifies a structural regime shift to fiscal dominance where traditional correlations invert: bond market cracking becomes bullish for risk assets because it triggers immediate Fed liquidity response. US industrial policy implementation regardless of election outcome creates structural tailwinds. The framework dictates moving from long-term USTs into SPX/TLT, S5INDU/TLT, GLD/TLT, and BTC/TLT ratios.

🟢 [E8455] China runs a $720B current account surplus with borrowing costs nearly 200bp below the US, has capital controls, and can manage surplus via CNY commodity payments. Gromen argues China's position is far stronger than consensus believes, countering the 'Chinese economy imploding' narrative. In economic war, the US fiscal position implodes before China's.