Treasury Bonds and Risk Capacity
Is This Morally Defensible?
On July 26, 2025, Forbes published a review written by John Tamny of my book, The Moneyball Method. It was also published on July 18, 2025, at RealClearMarkets.com. This brief essay will focus on a quote from their twenty-ninth paragraph:
There are as many investing styles as there are people. Still, as someone who recognizes what money is, and who has a healthy respect for money based on this understanding, it’s hard to imagine that Shupe would ever heap even a little disrespect on precious money by exchanging it with the U. S. Treasury in return for the latter’s excessive taxable access to our production.
Tamny makes an excellent point. One that is directly relevant to this book’s most important themes - and one that deserves examination. Is it disrespectful of precious money to exchange it for bonds from a State that destroys that which makes money precious? Is not money the stored legacy of productive virtues and the State a destroyer of wealth? Does this not sanction your own destruction? Is that not the pinnacle of immorality? Is any question more important than that? No.
In another context, think of owning Treasury bonds as receiving Social Security retirement checks. You may have a moral aversion to the State’s Social Security Ponzi scheme. You may have a practical aversion to its horrid inefficiency. And you are correct on both. But you are forced to participate, and you are morally entitled to the refund of some of the wealth that was coerced from your paychecks over decades – even if it is being confiscated from today’s wage earners.
The contradictions and injustice of government redistribution are immense and largely out of your control. At the same time, it is precisely because of the State’s taxable access to our production that U. S. Treasury bonds are the most reliable tool for the diversification of stock market risk.
Furthermore, the State’s intrusion into America’s economy and financial markets is the reason for the large deviation events that may wreck your future spending capacity. Among financial instruments, there is no better hedge.
It is not the income stream that is the focus of The Moneyball Method. Bonds are not a profit center, and in a taxable account, the taxes are a demerit. Accordingly, they are represented in the cash flow modeling. Essentially, high credit quality bonds are a tool for managing your risk capacity to protect your future spending capacity. Equities are your profit center. To learn more, please click the link below:
https://www.amazon.com/Moneyball-Method-Middle-Class-Manifesto-Objective/dp/1696009111/