Merrill's Harley Bassman On Why This Is The "BIG ONE" And Its Implications

Tyler Durden's picture

Must read observations from Merrill's Harley Bassman, formerly head of the RateLab:

Maybe I am showing my age, but I can assure you that as World Political events go, what is happening in the Middle East is actually the BIG ONE.

Respectfully ignoring the moral aspects of what is occurring and only focusing upon the cold numbers of dollars and the economy, we have tossed some serious uncertainty into the mix.

Without stepping over the line and opining as to all the various outcomes that do not bode well, let's just say that the 20bps rally in the T10yr since the "pot started to boil" is microscopic relative to the scope of events.

The reason there is no "Flight to Quality" bid for USTreasuries is that USTs are no longer the "Quality" asset.  Since the FED has turned on the printing presses, the "value" of the dollar has steadily declined. This is why the "Flight to Quality" is happening in Gold, Oil, Copper, Cotton, etc

Attention all you non-inflationists (and you know who you are), what more evidence do you need that the Govt's Plan "A" (inflation) is well underway?

There is little we could add to this.

h/t David