The U.S. Treasury Department unexpectedly announced yesterday that it would increase its long-term bond repurchase program, sending two clear signals. First, the recent surge in long-term yields to over two-decade highs has reached a critical point that the U.S. can no longer afford. However, the drawback of such policy actions is that they expose the U.S.'s bottom line, a scenario that is already unfolding. The second, and far more important, signal is that the U.S. has absolutely no intention of addressing the root cause—fiscal policy is out of control and there is an urgent need to reduce the fiscal deficit. On the contrary, yesterday's announcement was merely a financial tool to mask the escalating pressure on the U.S. Treasury market. In fact, yesterday's events were the clearest signal to date that the US is repeating Japan's mistakes and embarking on a path of currency devaluation. When fiscal policy spirals out of control, the government can certainly use various means to suppress yields, but this puts downward pressure on the currency because the market cannot obtain the risk premium it desires. What should have been a debt crisis has thus evolved into a currency crisis, the root cause of the yen's sustained weakness over the years. The market has fully digested this logic. After the announcement, the dollar fell sharply, dropping to its lowest level this year against emerging market currencies, consistent with my previous prediction of a weaker dollar in 2026. Since the Fed's interest rate meeting on July 29, the trading logic of "betting on currency devaluation" has returned. Yesterday, gold and other precious metal prices rose sharply. This price movement indicates that the market is prepared for a dollar devaluation, and yesterday's announcement essentially pushed for a dollar devaluation. The US Treasury is playing with fire. Japan's lesson is clear: once on this path, stopping the currency from falling, if not entirely impossible, will be extremely difficult. The core issue is whether the Treasury Department's actions yesterday achieved the desired results. I have my doubts. The chart above shows the US yield curve: the black line is the 2-year yield, the blue line is the 10-year yield, and the pink line is the 10-year forward yield. This indicator has been rising recently. Although it has fallen slightly, the decline has been negligible. The overall upward trend in long-term yields remains clear. Meanwhile, as shown in the chart above, the US dollar has plummeted against both G10 developed economy currencies (blue line) and emerging market currencies (black line). Furthermore, the chart below shows that gold and other precious metals surged yesterday. The market has already anticipated a renewed depreciation trend in the US dollar. Referring to Japan's experience, once a currency enters a depreciation spiral, it is almost impossible to stabilize. This bond repurchase operation is tantamount to playing with fire for the US.