GSI Banner
  • Free Access
  • Contributors
  • Membership Levels
  • Grey Swan Forecasts
  • Video
  • Origins
  • Sponsors
  • My Account
  • Sign In
  • Join Now

  • Free Access
  • Contributors
  • Membership Levels
  • Grey Swan Forecasts
  • Video
  • Origins
  • Sponsors
  • Contact

© 2026 Grey Swan Investment Fraternity

  • Cookie Policy
  • Privacy Policy
  • Terms & Conditions
  • Do Not Sell or Share My Personal Information
  • Whitelist Us
Beneath the Surface

Janet Yellen: The U.S. Government’s Worst DEI Hire

Loading ...Andrew Packer

January 10, 2025 • 3 minute, 32 second read


economyT-billstreasury bondsU.S. TreasuryYellen

Janet Yellen: The U.S. Government’s Worst DEI Hire

~~ Andrew Packer, Grey Swan Investment Fraternity

It’s just about Joe-ver. We’re days away from the Biden administration driving off into the sunset, or whatever direction the 46th President’s hospice care is relative to the White House.

As we reflect on Biden’s years of inflation, fueled in part by spending bills named the “Inflation Reduction Act,” it’s important to note that the U.S. government has been rigged for a crisis not long after Donald Trump returns to office.

Why? Janet Yellen, the departing Treasury Secretary, is the reason.

She’s deliberately booby-trapped the economy over the past year. And if things don’t go well, this sucker could blow.

Make no mistake: This is deliberate. Yellen is smart. She got her BA at Brown, her MA at Yale, and taught at Harvard and U.C. Berkley before moving into the bureaucracy of the Federal Reserve.

President Obama tapped her to lead the Fed after Ben Bernanke. In that role, Yellen showed tremendous caution, taking her time to gradually raise interest rates a quarter point at a time.

But it’s her recent actions at Treasury Secretary that pose a huge problem. Yellen took over in 2021. Interest rates were still at zero. Investors, particularly institutional investors, were still risk-averse.

The Treasury had a fantastic opportunity to issue 50-year bonds at a relatively low rate. But Yellen didn’t follow through and make a tough choice.

Instead of charting a new course, Yellen has focused the Treasury on meeting its funding needs with short-term bills.

Interest rates have been trending higher, which is a problem. For most of 2023 and 2024, the real issue is that short-term bills, thanks to the inverted yield curve, carried a higher cost than longer-dated securities.

By focusing on issuing short-term bills, the U.S. government has an increasing cash flow problem. Larger and larger amounts of money are coming due each month. A stronger mix of longer-dated securities would alleviate this rollover problem.

What’s truly bizarre is that Yellen made these moves when Biden was still running for re-election. And Yellen didn’t change course after Kamala Harris stepped in following Biden’s withdrawal. That’s why this appears to be genuine incompetence and not just a political maneuver to harm the incoming Trump administration.

Meanwhile, as we enter 2025, five-year bonds from the pandemic low yields of 2020 are now starting to roll over at rates close to 4.5%, compared to 0.1% when they were initially bought. That’s a massive jump in borrowing costs for Uncle Sam.

Adding in the high costs of issuing short-term debt during an inverted yield curve and refinancing pandemic-era low yields, it’s clear that Yellen’s short-term focus is costing the U.S. billions of dollars in extra interest it wouldn’t have to pay otherwise each year.

It’s no wonder that there are now estimates that Uncle Sam will have to shell out $2 trillion in interest payments on the debt soon after hitting $1 trillion in annual payments for the first time.

Like many other members of Biden’s cabinet, Yellen was likely chosen for her party loyalty and for ticking the right diversity boxes.

As corporate America and the incoming Trump administration look to scale back from DEI—diversity, equity, and inclusion—standards and move back to the American historical trend of meritocracy, Yellen will go down in history books for her incompetence in overpaying to fund the government.

Future Treasury Secretaries who screw up likely won’t be able to screw up on the scale as Yellen has in just four short years (although they’ll probably try).

It didn’t have to be this way.

Time will tell how Donald Trump’s Secretary of the Treasury pick, Scott Bessent, will fare. But he’ll likely be dealing with a crisis sooner rather than later. And a debt crisis can quickly spiral out of control in unforeseen ways.

Given the rising mix of short-term debt, it could truly create a real crisis. After all, finance textbooks and theories state that U.S. T-bills are the only truly risk-free asset.

Sadly, that thought may face a real test in 2025, and become the top Grey Swan event of the year. ~~ Andrew Packer, Grey Swan Investment Fraternity


The Hindenburg Five

February 24, 2026 • Addison Wiggin

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The Hindenburg Five
Piercing The Veil

February 23, 2026 • Addison Wiggin

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time.   That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Piercing The Veil
Oh. Canada

February 23, 2026 • Addison Wiggin

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

Oh. Canada
Matt Milner: SpaceX + xAI: What It Means for You

February 20, 2026 • Addison Wiggin

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!

Matt Milner: SpaceX + xAI: What It Means for You