Fresh off a politely acceptable B-grade 3-year auction, the Treasury followed up with a 10-year sale—$39bn priced at 4.173%, essentially unchanged from December, confirming that duration remains firmly frozen in place. Stopping 0.7bp through the WI, the strongest result since September, the auction suggests demand is alive and well—at least as long as yields go nowhere and everyone pretends that paralysis is stability.

More proof that the Treasury market is running on autopilot: the bid-to-cover came in at 2.554, essentially unchanged from December’s 2.550 and right in line with the long-running 2.50–2.60 comfort zone that has defined the past decade. Internals told the same story—Indirects took a hefty 69.7%, Directs jumped to 24.5% (the highest since 2014), and Dealers were left holding just 5.8%, one of the lowest shares on record—confirming strong end-user demand and a market perfectly content to drift, confidently paralyzed.

Overall, this was a relatively strong auction, suggesting that many investors may not yet have received the memo that the once “risk-free” asset is no longer free of risk in a world where the rule of law is increasingly eroding.

As the North Atlantic Terror Organization better known as NATO quietly auditions for irrelevance, Brussels has unveiled its latest blockbuster idea: replace 100,000 U.S. troops with a “unified” European army, complete with a shiny European Security Council and—naturally—no seat for post-Brexit Britain. European Defence Commissioner Andrius Kubilius assures us this can work, despite Europe’s inability to agree on debt rules, defence budgets, or even lunch menus. The plan assumes 27 sovereign nations will magically think, spend, and fight as one—something NATO existed precisely because Europe never could.



https://newsukraine.rbc.ua/news/eu-weighs-replacing-us-troops-with-unified-1768168275.html

European defence would require unanimous agreement among 27 countries with radically different geographies, trade links, and threat perceptions—because what worries Spain today is obviously identical to what keeps Poland awake at night. Brussels continues to issue one-size-fits-all policies that reliably help some members while disadvantaging others, whether on trade, migration, or war. The idea that such a system could function in a real military crisis ignores political reality: effective defence demands centralized command, unilateral decision-making, and unquestioned obedience—none of which coexist comfortably with 27 sovereign states pretending to be one. This contradiction is precisely why the euro was flawed by design and why the EU’s push toward deeper centralization is not fixing the problem but accelerating it. Europe is not integrating further—it is slowly, and inevitably, pulling apart.

🤵 The Macro Butler Special Service 🤵

🌐 Inflation is what chaos looks like in prices—when policy failure, shortages, and broken trust hit the grocery bill. 🌐

Read more here: https://themacrobutler.substack.com/p/inflation-is-what-chaos-looks-like

Listen to a summary of The Macro Butler weekly newsletter via podcast on Substack; YouTube; Rumble & TikTok.

https://themacrobutler.substack.com/p/inflation-is-what-chaos-looks-like-70f

The Treasury saved the best for last: the final coupon auction of the first full week of 2026 turned out to be the strongest of the bunch. Uncle Sam unloaded $22bn of 30-year paper in what can only be called a crowd-pleaser, pricing at a 4.825% high yield—just a hair above December’s 4.773%—and even stopping through the When-Issued 4.833% by a tidy 0.8bps. Not bad for a market everyone keeps declaring “exhausted.”

Demand didn’t just show up—it brought friends: the bid-to-cover climbed to a healthy 2.418, up from 2.365 last month and the strongest since June. The internals were equally well-behaved, with foreign buyers scooping up 66.8% (up from 65.4% in December and comfortably above the six-auction average of 63.7%). Direct bidders took a modest 21.3%, slightly below their recent norm, leaving dealers with just 11.95%—below average and mercifully light on inventory.

Bottom line: a blockbuster auction—and further proof that much of Wall Street still hasn’t read the memo that in the coming Trump-era stagflation, the former “risk-free” asset may now be the riskiest thing on the menu.

The Macro Butler sat down with Steve Yang of Natural Resource Stocks to crack open the Venezuelan Pandora’s box—Fortress America, ripple effects in the Taiwan Strait, and what all this geopolitical theatre really means for your portfolio (it’s not just noise).

So pour yourself a properly overpriced coffee ☕️, get comfortable, and prepare for a calm but unsettling upgrade to your worldview.

https://themacrobutler.substack.com/p/interview-with-natural-resource-stocks-6e5

Thanks to the shutdown circus, November retail sales only showed up on January 14—fashionably late, but still lively. Sales jumped 0.6%, the biggest gain since July, powered by a rebound in car buying and holiday shoppers who apparently ignored their budgets. Strip out autos and sales still rose 0.5%, with 10 of 13 categories in the green, from sweaters to sporting goods. Gas prices helped, EV incentives stopped hurting, and restaurants enjoyed a 0.6% rebound too.

Once adjusted for the ever-creative CP-Lie, “real” retail sales—helped by the recent cooling in price increases—are only just back to their December 2024 level and remain stuck in economic no man’s land, a place that has historically been a very bad neighborhood for the U.S. economy.

Bottom line: despite affordability angst and job jitters, the consumer is still very much alive—especially the wealthy one, armed with Black Friday deals, Buy Now Pay Later, and zero chill.

After the triumphalist CPI headlines meant to reassure voters that affordability has been heroically restored, U.S. wholesale inflation politely ruined the party by ticking higher in November. The Producer Price Index rose 0.2% month over month, up from 0.1% previously, thanks largely to higher energy costs, while core PPI (excluding food and energy) sat perfectly still—its calmest showing in three months. The message is less “inflation defeated” and more “inflation taking a strategic pause.” Companies appear reluctant to fully pass on higher costs—whether from energy, tariffs, or imports—for fear of crushing already price-sensitive demand, effectively playing margin-defense rather than price offense as consumers are increasingly allergic to higher prices. Beneath the surface, key PPI components that feed into the Fed’s preferred PCE gauge sent mixed signals: portfolio management fees jumped, healthcare costs crept higher, airline fares fell, and services overall refused to cooperate.

Focusing on what actually matters to investors and Corporate America—rather than the headline victory laps—the spread between core CPI and core PPI slipped back into the red in December. Translation: input costs are once again outrunning what companies can charge, a time-tested leading indicator of margin compression and, eventually, an equity market “re-education” on valuations.

In a nutshell: Behind the “inflation is dead” headlines, wholesale prices quietly reaccelerated, margins slipped back into danger territory, and Corporate America was reminded that when costs rise faster than prices, equity valuations eventually get a reality check.

With the rule of law seemingly on extended vacation—domestically and on the global stage after Donald Copperfield’s geopolitically chaotic playbook—nothing says “order” like the U.S. Mint hitting the pause button on silver coin sales. As silver prices blasted past $90 per ounce, the Mint graciously decided it can’t figure out how to price collectible coins anymore and temporarily suspended all silver numismatic product sales while it recalibrates prices.

Two weeks after China tightened the screws on silver exports, the U.S. Mint apparently decided pricing coins was now a contact sport. Starting January 1, 2026, China didn’t ban silver outright, but limited exports to 44 government-approved firms producing at least 80 tonnes annually and jumping through environmental and quality hoops. The effect? Fewer silver leaving China, spot silver hitting record highs, and the Mint waving a white flag. Even a “partial” export rule can wreak global havoc—and apparently, it only takes a bureaucratic hiccup in Shanghai to freeze coin sales in Washington.

https://www.reuters.com/world/asia-pacific/china-names-companies-allowed-export-silver-over-2026-2027-2025-12-30/

In a nutshell, with China tightening silver exports and prices surging past $90, the U.S. Mint threw up its hands and hit pause on coin sales, proving even Washington can’t price chaos.

When the drums of trade war beat loudest, many predicted the Middle Kingdom would stumble. Instead, China bowed politely, kept exporting, and recorded a record $1.2 trillion trade surplus in 2025. While tariffs tried to close one gate, factories simply found others—shipping more to Southeast Asia and Europe and climbing quietly up the value chain. As Confucius might note: when the path is blocked, the wise merchant takes another road. The lesson is simple noise is temporary, supply chains are adaptable, and those who underestimate patience often end up surprised.