Dylan, what does 5% actually mean for me?

Dear Fellow Investor,

Good morning. Happy Saturday!

I hope you’re having a slow morning. I’m planning on one right after I finish this.

But first, let’s talk about the most important number on Wall Street this week.

It wasn’t a stock price. It wasn’t the Nasdaq.

It was 5%.

This week, the yield on the 10-year U.S. Treasury pushed above 5% for the first time since 2007.

The 30-year bond climbed to its highest yield since 2004.

If you’re like most people, you’re probably asking yourself a simple question: “Dylan, what does 5% actually mean for me?”

Fair question. Let’s dig in.

Why This One Number Matters

The 10-year Treasury is the most important price in the world that most people never look at.

It’s what the U.S. government pays to borrow money for ten years.

And almost everything else gets priced off of it.

Your mortgage.

Your car loan.

What a company pays to borrow.

What investors are willing to pay for a stock.

When that number moves, everything moves with it — just a little later.

And it didn’t get here by accident.

The Fed raised rates on September 16th for the first time in three years.

Brent crude topped $106 a barrel on Thursday.

And on Wednesday, a survey of American businesses showed activity running at its fastest pace in more than five years.

A hot economy. Expensive energy. A Fed that’s hiking, not cutting.

Put those together and the bond market did exactly what you’d expect.

It demanded to be paid more.

What It Means for Your Wallet

Start with the house.

This week, the average 30-year mortgage rate crossed 7% for the first time since January 2025.

Think about what that does.

On a $400,000 loan at 3%, the monthly payment is about $1,690.

At 7%, it’s about $2,660.

Same house. Same loan. Nearly $1,000 more a month.

Now think about stocks.

When the U.S. government will pay you 5% a year for ten years, every stock has to compete with that.

Why take the risk on a company when Uncle Sam is paying you that much to sit still?

That’s the question the bond market started asking this week.

The Nasdaq closed at a record on Monday.

By Wednesday, it had given a chunk of that back as yields jumped.

That’s not a coincidence.

I’ve Seen This Number Before

The last time the 10-year paid 5% was the summer of 2007.

I remember it well — it was right around the time I started warning people about what was coming in 2008.

The number itself didn’t worry me.

What was hiding underneath it did.

Everyone had borrowed like money would be cheap forever.

And then it wasn’t.

You know what came next.

Now, I’m not telling you 2008 is around the corner.

I’ve been doing this almost 35 years, and I’ll tell you honestly — nobody knows that.

The banks today aren’t the banks of 2007.

But here’s what I do know.

When the price of money goes up, the weak spots show up.

They always do.

Somebody, somewhere, borrowed too much counting on rates to stay low.

The bond market is how you find out who.

And don’t forget the biggest borrower of them all.

Uncle Sam.

Back in 2020, the government could borrow for ten years at around 1%.

Every time it rolls that debt over now, it pays five times as much.

That’s more money going to interest and less to everything else.

Nobody in Washington likes to talk about that.

But the bond market does the math whether they talk about it or not.

So Why Did Gold Go Down?

Here’s what surprised a lot of people this week.

When yields jumped, gold got knocked down.

That seems backward. Gold is supposed to be your protection, right?

Here’s the thing.

The gold price you see on your screen isn’t really set by people buying bars and coins.

It’s set mostly in the paper market — futures and contracts traded by the big banks, most of them never backed by a single ounce.

When yields rise, those paper traders sell gold because it doesn’t pay interest.

That’s the paper price.

It tells you nothing about how much physical metal is actually sitting in the vaults.

And I’ve spent a lot of time digging into exactly that question.

What I found is that Western vaults are a lot emptier than the paper market is pretending.

The way I see it, the paper rig that’s held gold down for decades is breaking.

And September 30th — this Wednesday — is a date I’ve circled.

That’s when a 90-year-old law will expose what I believe is the greatest financial scandal in history.

I’ve put together a briefing that walks through the whole story — including the one stock I believe sits right at the center of it.

It’s worth watching before Wednesday.

Watch the briefing here before September 30th:

Enjoy your Saturday.

I’ll see you tomorrow.

“The Buck Stops Here,”