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Peter Boockvar & Dana Lyons - Commodities Hit 14-Year Highs as the 40-Year Bond Bull Dies

The KE Report Sep 5, 2026 53:35

Summary

Bond vigilantes now set the cost of capital — Japan's yield curve control exit and 2021–22 inflation ended the 40-year bond bull.

A broad commodity supercycle is underway, driven by years of underinvestment in oil, gas, and industrial metals; CRB hit a 14-year high.

Boockvar warns Treasury intervention in long yields invites escalating tests from bond vigilantes; price fixes rarely hold.

Gold miners earn outsized margins — AISC (All-In Sustaining Cost — what it really costs to produce an ounce) runs $1,500–$2,000 against gold near $4,000.

Energy equities (XLE) hit new all-time highs on a multi-year cup-and-handle breakout while crude oil itself stays range-bound.

Kevin Warsh's takeaways

  • Top takeaway Warsh is described as wanting to raise rates to fight inflation and believing the market should serve as its own disciplinarian.
  • Boockvar notes Warsh watches the TIPS market, where inflation expectations are subdued, and doubts he will hike given slow labor-market growth.

Scott Bessent's takeaways

  • Top takeaway Bessent is intervening in the yen (selling euro to buy yen) and having the Treasury buy long-end Treasuries to push long yields down.
  • Boockvar and Druckenmiller argue Bessent is doing 'price management' without the Fed's tools; Bessent has already threatened to get bigger in his interventions.

Dana Lyons's takeaways

  • Top takeaway Lyons says gold and silver are still in a post-blow-off consolidation since the January-February peak, but he has flipped from hedged to 'buying the dip' in gold and silver miners.
  • He flags a constructive pennant breakout in COPX copper miners and a multi-year higher-highs, higher-lows pattern in CPER copper, expecting a resolution to the upside.
  • Lyons highlights XLE oil equities breaking out of a long-term cup-and-handle back to 2014 highs and making new all-time highs ahead of crude itself.
  • On rates, he argues the 60-year interest-rate cycle likely bottomed during COVID and that rates are heading higher over many years, framing the move toward 5% as normalization.
  • Internationally he prefers developed markets (Spain, Italy, Canada, EWC) and is shying away from emerging markets and AI/semiconductor-heavy plays like EWY and EWT.

Peter Boockvar's takeaways

  • Top takeaway Boockvar argues the 40-year bond bull ended in two steps: the 2021-22 inflation shock and the Bank of Japan's July 2023 end of yield curve control, which he calls the bigger structural break.
  • He calls Bessent's Treasury buying of long-end Treasuries 'price management, not liquidity management' and warns the market will keep testing an official that tries to defend a price.
  • Boockvar describes the US economy as K-shaped: data-center construction and upper-income spending are strong, while housing is in recession and lower-to-middle income consumers are stretched.
  • He frames the current move as a longer-term commodity bull market built on years of underinvestment in oil, gas and industrial metals; the Bloomberg Commodity Index hit a 14-year high in the week recorded.
  • On gold, he says central-bank buying gives a firm floor and notes gold and silver miners are profitable at all-in sustainable costs of $1,500 to $2,000 an ounce, even with gold near $4,000.

Stan Druckenmiller's takeaways

  • Top takeaway Druckenmiller is quoted criticizing Bessent's intervention as 'price management' rather than 'liquidity management', with the host reading from a Druckenmiller op-ed arguing that once markets see Treasury defending a price, every rise in yields becomes a test of official resolve.