🟢 [E7600] China's 25-year energy partnership with Iran allows China to buy energy at up to 32% discount using non-USD currencies, reducing China's need for dollars and undermining a key source of UST demand. Potential US capital controls on China would further undermine USD's reserve currency status, creating a lose-lose dynamic for US hegemony.

🟢 [E7598] Gromen argues USD devaluation is the only politically palatable solution to restore foreign demand for USTs and improve US competitiveness. He states 'The US cannot have both capital controls AND the world's reserve currency as the USD is structured, only one or the other,' implying that attempts to restrict capital flows would accelerate dollar decline.

🟢 [E7599] The 2019 repo crisis revealed structural insufficient private sector demand for US Treasuries. Without Fed balance sheet expansion, repo rates spiked sharply as primary dealers could not absorb UST issuance. Gromen recommends moving out of duration, warning that rising long-term yields could persist despite Fed intervention, and that the deficit financing gap is structural rather than cyclical.

🟢 [E7603] The forced Fed monetization of deficits creates an inflationary resolution path, with Gromen noting 'ancillary benefits to equities & inflation.' He acknowledges deflation risk from rising long-term yields as a temporary counter but views the structural trajectory as inflationary given the Fed's inability to allow financial system seizure.

💬 [E7602] Gromen recommends equities (value over growth) as beneficiaries of forced monetary expansion, with 'ancillary benefits to equities & inflation' from the structural Fed deficit financing regime. He advises moving out of duration and USD into risk assets, positioning for an inflationary resolution to the fiscal crisis rather than deflationary collapse.

💬 [E7605] The China-Iran 25-year energy partnership enables China to purchase energy at up to 32% discount using non-USD currencies, restructuring energy trade flows away from dollar denomination. This represents a shift in global energy pricing architecture with implications for petrodollar recycling and UST demand.

🟢 [E7597] Gromen identifies a 'perfect positive storm' for gold driven by forced Fed deficit financing, declining foreign UST demand (particularly from China), potential USD devaluation, and the incompatibility of capital controls with reserve currency status. Gold is named as his favorite position, with forced monetary expansion and eventual USD devaluation as primary catalysts.

🟢 [E7596] The September 2019 repo rate spike forced the Fed into permanent balance sheet expansion, as private sector demand for USTs proved insufficient to finance US deficits. Gromen argues Powell chose liquidity provision over triggering financial system collapse, drawing parallels to Weimar Germany's Von Havenstein dilemma. Without the Fed accumulating USTs, 'the financial system seems doomed to seize up.'

🟢 [E7601] Gromen draws a structural parallel between Fed Chair Powell's 2019 dilemma and Weimar Germany's central banker Von Havenstein, who faced choosing between printing money to finance deficits or triggering economic and political crisis. This framing positions the current US fiscal trajectory as a regime change where the Fed is trapped into permanent monetization regardless of stated policy.

💬 [E7604] China's declining UST purchases and 25-year Iran energy partnership (with up to 32% discount in non-USD currencies) signal strategic de-dollarization. Potential US capital controls on China would further decouple the two economies, with implications for Chinese asset independence from USD-denominated financial system constraints.