RE: US Treasury Yields Hit Multi-Decade Highs – What Does This Mean for Bitcoin?

The real underlying problem no-one wants to talk about is sovereign debt, and it's affordability. Governments around the world are on a massive spending spree, especially the US government. Most of the spending is going to military spending, which is a great way to soak up cash while delivering no returns (or negative returns, if rebuilding costs after a war are considered).

I think governments are hoping they can solve the debt by simultaneously raising taxes/expropriating citizens (the two are effectively the same) and keep inflation high enough to inflate the debt away over time. It's a gamble; they have to do these things at levels just below the threshold of social unrest becoming revolution.

But in the meantime, they have to service the debt, making interest payments that increase as yields rise. Those yield increases reflect the market pricing in the very real risk of default - and yes, even the US could default as the petro-dollar becomes less relevant than the petro-yuan. At the rate US debt is increasing, it's only a matter of time before interest payments exceed tax revenues, at which point the government has the choice to default or borrow just to pay the interest.