The Bond Market Is Flashing a Major Warning | Steve Hanke

Persistent inflation and geopolitical instability threaten the U.S. economy, as money supply growth continues to exceed targets, fueling rising bond yields and potential asset bubbles. The U.S. has lost strategic leverage in the ongoing conflict with Iran, which has disrupted global oil supply chains and exacerbated fiscal deficits. Bond markets now serve as the critical indicator of systemic risk, as investors demand higher yields to compensate for increasing debt burdens and the threat of treasury sell-offs. To address these structural issues, Professor Steve Hanke of Johns Hopkins University proposes a limited constitutional convention to implement a mandatory debt break. Modeled after Switzerland’s fiscal framework, this approach would require balanced budgets over the business cycle and restrict government spending growth, shifting economic control from Washington back to the private sector.