Big Beautiful Bond Rally To Drive Stocks and Commodities Higher

Source: Barry Dawes 08/20/2025

Barry Dawes of Martin Place Securities shares his thoughts on a coming bond rally and how it may impact commodities.

Gold is timeless and has been considered the population’s insurance against debasement of currency by politicians and bureaucrats.

The price of gold was freed in 1968 and in August 1971 the set up by LBJ left Nixon forced to abandon the Bretton Woods Agreement on a US$ Gold Standard.

Lying and conniving politicians and bureaucrats ever since have been gleefully spending our money on any vote-buying bribe to enrich and entrench themselves, whilst building up a Welfare State of government-dependent voters.

George Orwell was quite right in Animal Farm as Napoleon turned Snowball’s ‘Four Legs Good, Two Legs Bad’ slogan into ‘Four Legs Good, Two Legs Better.’

Such is the nature of men.

You know how that one ended.

Students of history will have also noted the January 2017 Presidential Inauguration address.

“We, the citizens of America, are now joined in a great national effort to rebuild our country and restore its promise for all of our people. Together, we will determine the course of America and the world for many, many years to come. We will face challenges. We will confront hardships, but we will get the job done. Today’s ceremony, however, has very special meaning, because today we are not merely transferring power from one administration to another, or from one party to another, but we are transferring power from Washington, D.C., and giving it back to you, the people. For too long, a small group in our nation’s capital has reaped the rewards of government, while the people have borne the cost. Washington flourished, but the people did not share in its wealth. Politicians prospered, but the jobs left and the factories closed.

The establishment protected itself, but not the citizens of our country.

Their victories have not been your victories.

Their triumphs have not been your triumphs, and while they celebrated in our nation’s capital, there was little to celebrate for struggling families all across our land.

That all changes, starting right here and right now, because this moment is your moment — it belongs to you.

It belongs to everyone gathered here today, and everyone watching, all across America.

This is your day.

This is your celebration, and this, the United States of America, is your country.”

At this point, the President was flanked by two columns of military officers. The head bands of the two officers at the front of each column were Judge Advocate General (JAG) and Military Intelligence.

Note this well!

The current Administration is methodically gutting the Swamp of the Deep State Bureaucracy to reduce Outlays and boost Receipts. Secretary Bessent is talking about paying back debt.

That can only happen through Budget Surpluses.

Criminal indictments will follow, and after the 2026 Midterms, the activist Judiciary will be cleaned out. EO13848 is still out there to assist with reducing the Federal Debt.

This is a major Turning Point.

And from this point, the cleansing will be applied right across the world, although it might take a bit more time yet.

And you can sublimate Animal Farm into Canberra right now.

For too long, a small group in our nation’s capital has reaped the rewards of government, while the people have borne the cost.

Canberra flourished, but the people did not share in its wealth.

Politicians prospered, but the jobs left, the gasfields, refineries, and the factories closed.

The establishment protected itself and its NET ZERO mates, but not the citizens of our country.

Their victories have not been your victories.

Certainly rings true!

These global changes will be shown through Gold, Bonds, and Currencies.

The summation of events since January 2017 indicates that 2025 is now as significant as August 1971 and confirms the inversion turning point.

Gold won’t be so important anymore from a US$ perspective.

Gold probably hasn’t run its race yet in Euros, Yen, Yuan, and Pounds, so vigilance is still required.

Watch those currencies and their bond yields.

Gold is now not so important, and it is now the time for the real economy to come to the fore.

Bonds

I have been having some robust debates on X platform about U.S. T bonds.

It is clear that very few have more than a scant understanding of what bonds are.

You will recall that this U.S. Debt Maturity Profile was built from the original Treasury source data.

Almost 50% of Treasuries are <30 months duration.

Almost no > 10-year bonds are held by the market.

The annualized monthly U.S. Federal interest expense peaked back in March, and as these charts clearly show, these maturing short-term bills are being rolled over at ~25% lower rates than a year ago.

Also, as notes and bonds issued earlier at much higher coupons of 10, 20 or 30 years ago mature and are replaced by (mostly) lower cost short term instruments the interest expense falls even faster.

This yield curve is inverted such that bond fund managers are forced into short term maturities with few wanting to commit to two to five years at lower yields and even fewer wanting to risk going to 10 years.

This is actually creating the greatest aggregation of liquidity (Zero to two years U.S. Treasuries are essentially ‘cash’) in history.

When the market forces the always-following Fed to cut the FFR by 50 basis points next month, there will be a stampede into longer dated bonds.

Except there are hardly any bonds to buy.

Who knew?

US Stocks

Lower bond yields reduce the discount rate on asset values.

The Dow 30 Industrial are about to begin a new upleg.

Utilities have been making new highs.

Transports to follow soon.

Gold and Commodities

Gold is also overbought against commodities.

Gold’s parabolic rise has seen it double against commodities.

That is too much.

Gold broke out short-term against the Dow 30 Industrials but peaked against the longer-term downtrend.

Same versus the S&P 500.

Resources Sector

This is where the action will now be.

Metals and mining versus US$ Gold:

You can see turning points.

Head the markets!

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