What does it mean that the yield on 30-year US Treasury bonds has surpassed 5%, reaching its highest level since 2007? Let me share some hot knowledge first. The higher the yield of US bonds, the more it means that no one is willing to buy them, because only when there is a shortage of buyers do higher interest rates need to attract funds. The interest rate at the time of bond issuance is fixed, so the current yield=fixed interest/market price. Therefore, the current situation is that investors sell US bonds, causing bond prices to fall and interest rates to rise. As the anchor of global risk-free assets, 30-year US bonds mean that investors' concerns about the sustainability of the US fiscal system, coupled with factors such as high inflation and high debt, reduce long-term risks by selling 30-year US bonds. It is precisely because of the rise in US bond interest rates that venture capital originally used for investing in stocks, real estate, and Bitcoin may be invested in risk-free US bonds, thus sucking on global liquidity. Hey, it's strange. The front foot just said that no one bought US bonds due to a large sell-off, which led to an increase in yields, but the back foot said that funds would buy US bonds because of the increase in yields. Isn't this contradictory? This is the scariest thing if the US Treasury yield continues to rise, it will enter a death spiral where both short-term and long-term funds are entangled. The people who bought 30-year US bonds were a group of "dead money" who were very risk averse. Now they sell them to avoid long-term risks. Therefore, these funds that have no liquidity will buy short-term treasury bond bonds, monetary funds and even hold dollar cash, and will not buy risk assets such as stocks. Therefore, after long-term funds come out of US bonds, they will still be long-term funds. And because the yield on US Treasury bonds has risen, the active money that originally pursued higher yields to bear certain risks may become itching, and they may sell risky assets to purchase US Treasury bonds, so short-term funds become long-term funds. So this is not a contradiction, but a trade-off between short-term and long-term funds, and the tricky part is that it is a one-way trade-off. The most extreme scenario is a sustained and sudden increase in interest rates to 6% or even higher, as many banks, insurance companies, pension institutions, and other financial institutions purchased long-term US bonds during low interest rate periods, leading to a significant decline in their book assets. As a result, they may be forced to sell or even experience a collapse, which further drives up US bonds and enters a more terrifying death spiral of asset impairment → selling US bonds → interest rate increases → institutional defaults → asset impairment. This is also the reason why Buffett holds a huge amount of cash and remains inactive while waiting for opportunities. Now he only hopes that the US Treasury can stabilize at 5% and continue to change hands, digesting the selling pressure, otherwise Buffett will really succeed.