Interest Rates to 10%: Why the Treasury Market is the Real Speculative Bubble (Not AI) | Russell Clark

July 22, 2026

AI Summary

5 min read

In the 1970s, a can of Coke was supposed to cost $100 by 2015. It didn't, because the political environment shifted toward free trade, union-busting, and wage suppression—a deflationary regime that crushed inflation expectations. Hedge fund manager Russell Clark argues that regime is now reversing, and the biggest speculative bubble isn't AI stocks or crypto. It's U.S. Treasuries.

The Treasury Market as the Real Bubble

Clark’s central claim is that the U.S. Treasury market is priced for a world that no longer exists. For the last 40 years, a deflationary political consensus—Thatcher, Reagan, free trade, currency devaluation—kept wages low and inflation contained. Central banks and sovereign wealth funds piled into Treasuries as foreign reserves, pushing yields down and prices up. But that consensus is breaking.

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What you'll learn

1 (00:00) **Opening Thesis: Why 10% Treasury Yields Are the Target** - Russell Clark argues the real speculative bubble isn't AI but the U.S. Treasury market, laying out his framework for a 10% yield on the 10-year.
2 (01:38) **The Treasury Market as the Real Speculative Bubble** - Clark explains why he sees Treasuries, not AI, as the bigger speculative risk, rooted in a breakdown of fiscal discipline.
3 (08:34) **The Political Shift: From Deflation to Inflation** - Clark contrasts the post-1980 free-market era with the current move toward pro-labor, inflationary policies.
4 (13:53) **Why Treasury Unsustainability Finally Matters Now** - Clark explains why decades of warnings about debt are only now becoming market-relevant.
5 (19:00) **The Housing-Wage-Interest Rate Nexus** - Clark details his specific calculation for why 10% Treasury yields are needed to solve the housing affordability crisis.
6 (22:16) **Real Yields Must Stay High: A New Normal** - Clark argues that 3% real yields are not unsustainable but are the new baseline in a pro-labor, pro-spending political environment.
7 (26:58) **Trading the Thesis: Managing Short-Term Noise** - Clark explains how he navigates short-term market moves while maintaining a long-term view of higher rates.

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Show Notes

Learn more about Teucrium’s Soybean ETF (SOYB) here: https://teucrium.com/soyb

Free E-book from Teucrium: https://insights.teucrium.com/why-investors-turning-to-commodity-etfs

In this episode of Other People's Money, Max Wiethe sits down with hedge fund manager Russell Clark to discuss why he believes the U.S. Treasury market is a much larger and more dangerous speculative bubble than AI. Clark details his macroeconomic outlook, arguing that a shifting political landscape focused on 7% wage growth and lower living costs will eventually push the 10-year Treasury yield up to an astonishing 10%. To stabilize affordability for younger generations, he predicts real estate will remain flat nominally while heavily declining in real terms. Clark also breaks down the massive capital expenditures in AI, viewing them as defensive strategies by legacy tech giants to protect their moats rather than mere speculation. Finally, Clark also warns about sectors reliant on low rates and the severe illiquidity and mispriced risks currently lurking within the private credit and private equity markets.

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Timestamps:

00:00 Intro

01:38 Why Treasuries Look Risky

04:33 Foreign Reserves Shift from Gold to Bonds

08:59 Politics Turns Inflationary

14:12 Japan Leads

16:09 Wage Inflation Drives Yields

20:37 Sponsor Break SOYB

21:58 High Real Rates New Normal

26:14 Trading Long View vs Noise

29:09 Housing Tug of War

34:02 Politics Converge Anyway

36:03 Chips Are New Oil

38:38 Is AI a Bubble?

44:12 AI and Wage Politics

50:37 Strategic AI Spending

54:17 Leverage Unwind Risks

59:29 Private Credit Red Flags

01:04:13 Wrap Up and Links