The chart above is the price history of the 10 year government bond. That trading range goes back to 1984. Going back over 30 years when it gets to the high end of range it eventually stalls out and then falls back to the low end of range. There was always FED intervention to manage the trading range but they are quickly losing control and the Bond Markets are showing that they want to crash.
Last year the FED nearly doubled the size of it’s balance sheet from around 4 trillion to a little over 7 trillion, with a big chunk of that long term treasuries like the 10 year. If they did not buy treasuries, prices would crash to a much lower price. If prices crashed to a much lower price, yields would necessarily rise, probably to north of 5%. That is something that the FED does not want to happen because at this stage that would crash the entire system. The credit bubble would burst.
If you look at that chart you can see that the FED is fighting gravity. If they had to double the balance sheet last year to support bond prices, and they are still crashing, what the hell are they going to do this year? I would guess that they would have to go to a 15 trillion balance sheet this year to prevent the crash in the bond market. Then what about next year?
The game is over folks. This is like in chess where you are going to be check mated within 3 moves so all you can do is move a piece back and forth to try stall out the inevitable.
In the mean time the further balance sheet expansion will put another double digit year on the board for commodities. Check out crude. It’s already up to Pre Covid levels around 60 bucks and it’s not even the summer driving season.
The economy under the Biden Administration is toast. The reward for rigging the election is that the Democrats will have control of the house, the senate, and the presidency for what is about to be one of the biggest economic collapses in modern history.
Gold prices will go to the shitter initially. Any time yields trend up people dump gold. Take a look at the gold charts from summer onward once the yields on the 10 year bottomed out.
However over the longer term as the dollar gets blown out gold prices will trend up.
Don't let that negate the theme that commodities are all inflating. Take a look at copper. It's now at 4 bucks. Big rally. Same with Palladium. Look at lumber, wheat, corn, soy etc./
Palladium is also extremely rare and a pain in the ass to mine. It also has conventional purposes, since Palladium is used in electronics. Gold is as well, but not to the extent that Palladium is.
Thanks. My art supplies are dependent upon gold spot and I was afraid I couldnt afford much this yr bec back in Aug I had read that gold futures for 2021 were going up to $3000
I think gold backs up to at least 1700 bucks. I lost about 900 bucks in one day last week trying to time the bounce back up before saying fuck it, wait for it to go even lower.
It will crash in phases but I think I think it occurs over the next 2 years. This is going to get fucking bad.
In 2008 we were days away from money market becoming illiquid. Money market is as near cash instrument as you can possibly get. This time I think money market does fail, and what that means is that banks will fail and atm's and credit cards will fail.
Bank runs, mass looting, civil war, all under the Biden Administration's watch.
I think we are at least a year away from that stage. We have not started phase 1 of the crash yet. There probably needs to be at least 2 deep crashes with FED balance sheet expansions of 5 trillion plus a piece before we are in full doomsday scenario.
In the mean time hedge with purchases of hard assets and get a safe for storing petty cash.
That's all well and nice, but your graph doesn't take into account what currency is used to purchase oil and what currency is the backup note for the rest of the world.
Why do you think we can just print money like crazy and we don't end up like a shit hole South American country? Because our currency is what props everyone else up. If our currency crashed, the rest of the world's economy would follow. Other countries don't want that. So until we're no longer the backup bank note for the world, we're relatively shielded from a full scale crash.
the 10 year bond is US government debt priced in US dollars so it fully takes that into account. The FED is printing fiat dollars to purchase US government debt in order to support bond prices and suppress yields. That is directly dilutive to our currency and that is why the dollar index is now at 2018 lows of 90.35 and is trending lower. The dollar index will probably be down to 80 bucks by the end of the year because of the stimulus packages and additional fed purchases.
Every empire and every currency regime throughout history has eventually failed. Ours is failing right now. You can watch it live on investing.com every day.
The chart above is the price history of the 10 year government bond. That trading range goes back to 1984. Going back over 30 years when it gets to the high end of range it eventually stalls out and then falls back to the low end of range. There was always FED intervention to manage the trading range but they are quickly losing control and the Bond Markets are showing that they want to crash.
Last year the FED nearly doubled the size of it’s balance sheet from around 4 trillion to a little over 7 trillion, with a big chunk of that long term treasuries like the 10 year. If they did not buy treasuries, prices would crash to a much lower price. If prices crashed to a much lower price, yields would necessarily rise, probably to north of 5%. That is something that the FED does not want to happen because at this stage that would crash the entire system. The credit bubble would burst.
If you look at that chart you can see that the FED is fighting gravity. If they had to double the balance sheet last year to support bond prices, and they are still crashing, what the hell are they going to do this year? I would guess that they would have to go to a 15 trillion balance sheet this year to prevent the crash in the bond market. Then what about next year?
The game is over folks. This is like in chess where you are going to be check mated within 3 moves so all you can do is move a piece back and forth to try stall out the inevitable.
In the mean time the further balance sheet expansion will put another double digit year on the board for commodities. Check out crude. It’s already up to Pre Covid levels around 60 bucks and it’s not even the summer driving season.
The economy under the Biden Administration is toast. The reward for rigging the election is that the Democrats will have control of the house, the senate, and the presidency for what is about to be one of the biggest economic collapses in modern history.
What will happen to gold prices?
Gold prices will go to the shitter initially. Any time yields trend up people dump gold. Take a look at the gold charts from summer onward once the yields on the 10 year bottomed out.
However over the longer term as the dollar gets blown out gold prices will trend up.
Don't let that negate the theme that commodities are all inflating. Take a look at copper. It's now at 4 bucks. Big rally. Same with Palladium. Look at lumber, wheat, corn, soy etc./
Palladium is also extremely rare and a pain in the ass to mine. It also has conventional purposes, since Palladium is used in electronics. Gold is as well, but not to the extent that Palladium is.
Palladium is up 131.72% over the last 3 years.
Thanks. My art supplies are dependent upon gold spot and I was afraid I couldnt afford much this yr bec back in Aug I had read that gold futures for 2021 were going up to $3000
I think gold backs up to at least 1700 bucks. I lost about 900 bucks in one day last week trying to time the bounce back up before saying fuck it, wait for it to go even lower.
Will this be worst or the modern day equivalent of the stock market crash?
It will crash in phases but I think I think it occurs over the next 2 years. This is going to get fucking bad.
In 2008 we were days away from money market becoming illiquid. Money market is as near cash instrument as you can possibly get. This time I think money market does fail, and what that means is that banks will fail and atm's and credit cards will fail.
Bank runs, mass looting, civil war, all under the Biden Administration's watch.
So, when would be a good time to pull my money out if a federal credit union/bank to be safe?
I think we are at least a year away from that stage. We have not started phase 1 of the crash yet. There probably needs to be at least 2 deep crashes with FED balance sheet expansions of 5 trillion plus a piece before we are in full doomsday scenario.
In the mean time hedge with purchases of hard assets and get a safe for storing petty cash.
That's all well and nice, but your graph doesn't take into account what currency is used to purchase oil and what currency is the backup note for the rest of the world.
Why do you think we can just print money like crazy and we don't end up like a shit hole South American country? Because our currency is what props everyone else up. If our currency crashed, the rest of the world's economy would follow. Other countries don't want that. So until we're no longer the backup bank note for the world, we're relatively shielded from a full scale crash.
Good or bad, that's the way it is.
the 10 year bond is US government debt priced in US dollars so it fully takes that into account. The FED is printing fiat dollars to purchase US government debt in order to support bond prices and suppress yields. That is directly dilutive to our currency and that is why the dollar index is now at 2018 lows of 90.35 and is trending lower. The dollar index will probably be down to 80 bucks by the end of the year because of the stimulus packages and additional fed purchases.
Every empire and every currency regime throughout history has eventually failed. Ours is failing right now. You can watch it live on investing.com every day.