The Week in Charts (8/25/26)

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The most important charts and themes in markets and investing…

1) Moving One Step Closer to a Debt Crisis

The US National Debt is now $40 trillion.

How did we get here?

Washington’s solution to every problem remains the same:

Borrow more. Spend more. Let our children and grandchildren deal with the consequences.

There is simply no fiscal discipline in sight. Unfortunately, it will take a crisis before anything changes.

2) A Desperate Attempt at Financial Repression

As the National Debt hit $40 trillion, long-term government bond yields hit their highest level since June 2007, with the 30-year rising above 5.3%.

The very next day, the Treasury announced that it would be doubling the size of their “debt buybacks” to $4 billion. But this is not a debt reduction, just a debt reshuffling, with the Treasury buying longer-dated bonds and issuing more shorter-dated bills.

When yields barely budged, they announced that they would consider tapping the $1 trillion General Account in an attempt to suppress bond yields.

So instead of cutting spending and reducing deficits – which would actually be a long-term solution to the problem – they are resorting to financial engineering.

Step 1: Create the problem.

Step 2: Refuse to fix the problem.

Step 3: Manipulate the market to hide the problem.

Will this help bring long-term bond yields down?

Perhaps in the short run, if they throw enough money at it.

But as Stan Druckenmiller said:

“Governments defending prices against fundamentals always lose. The only variable is how much they spend before conceding.”

3) The “Debasement Trade” Is Back

Immediately after the Treasury buyback announcement, we saw a resurgence in the so-called “debasement trade.”

Bitcoin spiked 19%, Gold rallied 6%, and the US Dollar fell 1%.

Washington won’t get its fiscal house in order, so investors are buying alternatives to the Dollar.

4) The Housing Market Still Has an Affordability Problem

10 years ago, the 30-year mortgage rate was 3.4% and the median existing home price in the U.S. was $243k.

Today, the 30-year mortgage rate is 6.7% and the median existing home price is $434k.

The result: a $38k increase in the required down payment (assuming 20% down) and 160% increase in the monthly mortgage payment (from $862 to $2,240).

Needless to say, incomes are not up anywhere near 160% in the past decade, leading to a collapse in affordability.

The good news: supply is slowly coming back to the market. There are now over 1.1 million homes for sale in the US, the highest inventory since 2019.

5) The Most Overpriced Product in America?

Here’s an absolutely insane stat: 15 U.S. colleges now cost more than $100,000 per year…

That’s $400,000+ for a four-year degree.

Most students are not getting anywhere near $400,000 worth of value from these schools.

Which means that higher education may be the most overpriced product in America, and one that is ripe for disruption.

Over the last 40 years, College Tuition and Fees in the US have increased by 655% (7.5x) while overall Consumer Prices (US CPI) are up 204% (3x).

The next 40 years will likely look very different given economics, changing demographics, and technological forces. More and more students are questioning the value they are getting and enrollment is expected to drop 13% by 2041due to a projected decline in the number of 18-year-olds.

With the advent of AI, the cost of delivering a high-quality education should fall dramatically. How quickly colleges will pass those savings on to students is another question, but the current trend is not sustainable.

6) The Off-Balance Sheet Surge

Big Tech’s AI spending spree is much bigger than it looks.

Nine major tech companies have roughly $3 trillion in off-balance-sheet commitments, far above reported capex ($600 billion).

The AI arms race is creating enormous obligations investors may be underestimating.

When Nvidia reports earnings this week, a bigger focus will be placed on those obligations. Nvidia is increasingly tying its own fortunes to those of its customers. Rather than simply selling its chips and letting demand stand on its own, the company is helping to finance, backstop, and guarantee the very investments driving that demand.

7) A Few Interesting Stats…

a) The total amount wagered on sports in the US has increased by 25x over the past 7 years.

Related: More than half of Gen Z investors redirected investing dollars into sports betting over the last year. And 26% now consider betting part of their long-term financial strategy.

b) Self-driving taxi company Waymo is now doing over 1.4 million rides per month in California, a 10x increase over the past two years.

c) 25 years ago Walmart’s revenue was 68x larger than Amazon. Today, Amazon has surpassed Walmart to become the largest company by revenue in the world.

d) 55 million Americans (15% of the population) are projected to be on GLP-1 weight loss drugs by 2035. The biggest beneficiary of this trend: Eli Lilly ($LLY), who’s market cap has grown from $88 billion to $1.2 trillion over the last decade.

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And that’s it for this week. Thanks for reading!

Every week I do a video breaking down the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.