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Bond Markets Revolt against Central Banks

June 7, 2022

“This notion of no confidence, this notion of fear, I think it has to do with being unmoored, being undone, and there being no one to help in that situation. My view, and yours as well, is that education has so much to do with the re-mooring, it has so much to do with the anchoring, it has so much to do with confidence that remains, even when you’re in a circumstance of no confidence.” — David McAlvany

Kevin: Welcome to the McAlvany Weekly Commentary, I’m Kevin Orrick, along with David McAlvany. 

Dave, your dad and mom were in town from the Philippines a couple of weeks ago, and he told a funny story. He was in the Air Force back in the sixties and he was a medic, but there was a reason he was a medic. They actually wanted him to be an aircraft mechanic until he took the test, and I think he got, what, 4% on the test for aircraft mechanics? And so they made him a medic. Now, I’m just wondering, I heard the story this weekend about what happened to you with the diesel engine. Did you inherit your dad’s mechanical skills?

David: Well, I think if it’s the mechanics of interest rates and currencies, maybe we’ve got that down a little bit more than the actual physical world of nuts and bolts and gears and things of that nature. I will say my dad’s first day on the job as a medic, he was given a needle and there’s a guy who needs a shot in his butt and he managed to bend his first needle. I don’t know that the 4% grade on the mechanic immediately slotted him towards 100 hundred percent success rate as a medic. He did enjoy serving, I’m sure it beat the alternative of washing dishes.

Kevin: If you can just tell, in short order, what happened with you and your family this weekend? It actually was pretty heartwarming, but it started out sort of scary. You had gone up to Denver for a school conference for your kids, and on your way back, you were pulling the Airstream trailer and you started smelling diesel. Tell the story from there?

David: What a weekend, getting to see friends and our kids’ friends, and then going to see Dear Evan Hansen, a play that many have probably seen. Then driving back, and our engine breaking down on Wolf Creek Pass. I thought I overfilled the gas tank, so there was a little smell of diesel. But then it starts to smell worse, and we think, well, maybe we should just turn off the AC and open the windows. Then it’s even worse, we get down to Pagosa [Springs, CO], pull over, and we’ve got a small geyser under the hood and diesel’s going everywhere. I go and search for a little J-B Weld, because, I mean, that’ll fix anything, won’t it?

Kevin: That’s sort of scary, Dave, the very thought that you thought that would fix it.

David: Yeah, well, I mean, there’s a hole. How do you plug a hole? A little J-B Weld will do the job. 

Anyways, I meet this young guy, and he’s from North Carolina. It’s his first day in Colorado, and he has it. The convenience store that I went to didn’t. There were very few places open at that point of the day. I could not get over to the auto parts store, which was about five miles away, and so he bails us out. Calls me 10 minutes later and says, “Why don’t I just haul you back to Durango?” So, AAA took the truck into the dealership and he came with his truck, and an hour later, hauled us to Durango. It was just a remarkable bit of kindness, not something that I’m accustomed to seeing, but something I’m incredibly grateful for. 

I think if you reflect on the upside down nature of the world we live in, and the degrees and illustrations of unkindness, an occasional reminder of someone stepping outside of their own personal priorities and time schedules,...