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10Y Treasury Yield Breaks Key Support
Treasuries continue to rally with 30Y outperforming but it is the 10Y that is crucial as it just broke through a key support level around 2.57% yield to its lowest in almost 7 months.
And as Goldman notes
Yields have broken support - This includes the lows from Feb. 3rd and May 5th. There's a fairly wide gap below it down to ~2.47% (Oct. ’13 low/38.2% of the May/Sep. ’13 rise). The likelihood of reaching that level seems to be increasing
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All that inflation... oh wait.
Inflation is based on expansion of money and credit not the value of treasury bonds. The Fed is printing and savers are punished, so yeah, inflation.
Gee.. How can this be when we're having such a strong recovery!? /sarc
Wonder how much little Belgium is buying right now...
Hah ha ha ha ha ha
Liquidity Trap, Bitchez
http://www.scifilists.com/wp-content/uploads/2012/03/its-a-tarp-719413.jpg
Money Velocity is extremely important when considering inflation. I know the Austrians believe that inflation is pure money supply, but if everyone is hoarding their paper confetti (notes) then we can see savage price drops even as paper is being printed digitally by the trillions. Any experts on Austrian Economics want to comment on this?
Indeed. Moreover, while QE is in fact theft via inflation, ZIRP (NIRP in real terms) is far more destructive for capital and savings...
Say it with me "Roll the motherfuckoing guillotines"
Nothing changes otherwise.
No problem the NY FEd has a hot button on that VXX
Would love to know who is gobbling all that garbage up...
All the usual suspects, The BernankenYellen, Yen carry traders,.... Belgium...
Unlike the contorted narrative of this morning -- how about this:
Anyone who sees that there is poor growth and the ECB isn't going to goose it any.
And the inflation is the wrong kind. It's not wage boosts because of explosive economic activity indicating huge demand for workers. It's food. And oil. From scarcity.
How do you think all that drilling in the Bakken is financed? ZIRP loans. Raise those rates and the oil flow declines.
And anyone think $102 is GDP positive?
We are both on the same page. It is energy that will bring the whole house of cards down. Like I said on a previous thread.....Scarcity is a bitch.
Correct, in the meantime "yields" will be driven negative...
Agreed, but U.S propaganda aside, "yields" are already negative.
and wait until high yield credit/bank loan crap blows sky high. that will really shove UST yields lower.
We have wholesalers coming into our office pushing that crap all the time. I remember two last two times that happened, and it wasn't good.
Please, most people don't understand basic math let alone the concept of "nominal" versus "real" rates if return.
Truth.... BTW, I am well aware that you already knew that fact, I like to make sure that it is pointed out for those who aren't.
I am pretty certain those are all the same people.
It appears to be cannibalism.
http://www.paulcraigroberts.org/2014/05/12/fed-great-deceiver-paul-craig...
When life give you lemons... you make hamburgers.
When life gives you lemons... you apply for $60k a year in Govt benefits and say goodbye to work forever!
When life gives you lemons, find someone else whose life has given them tequila...then...
...then bang ding ow
When life gives you lemons...the government send the IRS to collect a windfall lemon tax.
i think you meant resistance
Isn't this just more confirmation that one should be in stocks for the near term?
Why is it that the US gov't can borrow so much for so little when the debt is so large.. Back in the 70s and 80s rates were around 10% and the debt was peanuts compared to now..
How is this possible? And how does it ever change?
View these things through the prism of oil production costs and you'll begin to understand.
And btw, $102. Anyone think that is GDP positive?
Low rates didn't help the Japanese stock market, printing did.
The stock market is a government (wealth effect) friend for only so long. If a stock market continues to rise, why buy government bonds? Government will really start slapping Wall Street around if it has to. They got the military on their side also.
It hasn't changed in Japan for over two decades. I see no reason for it to change in US for a very long time.
This is not the seventies and you must understand that rates will never go above 3.5% again. We are Japan and we have a host of unfunded liabilites that are now coming due. .gov will borrow and the fed will print until their eyes bleed in order to keep rates down. As far as the stock market goes, for right now it is a policy tool, but eventually they will have to abandon that idea as the wealth gap gets even wider. Even though the peasants are getting a few token bernanky bucks thrown at them, they will rise up if they get hungry enough.
I can't argue with that!
But let's not forget the ZH's posts all the way back from January and February (especially the ones from MacNeil Curry) strongly argued that this could happen, especially when most of Wall Street bet the other way....in fact it bet over 1$ trillion that rates would rise......OUCH!
http://online.wsj.com/news/articles/SB10001424052702303417104579544080521257094
the key reversal will be November elections; and the experts are long at the top.
In Belgium, they want to build a new highway system arround the city of Antwerp...
great idea...
kickstart the economy and all...
WITH 18 LANES!!!!
now if that won't give you stress in the morning when you need to take your exit I don't know....
I wonder if we'll make guiness book of records again...
but in a way, the project was downsized because first they wanted 29 LANES!! What is that??? 5 FOOTBALL FIELDS WIDE OF LANES????
Real world Frogger. I will never say life does not imitate art again.
Gotta have some place to put all those lamposts.
It was originally 10 lanes to the airport, then 18 lanes to city, and finally the fat 29 lanes to the shrinks office. Thats why the mental health field is only a field of dreams and not one of substance.
Just further preparation noise for the "big one".
Meanwhile mom and pop are gobbling up the equities.
.6%
3.6%
Which is more likely in 12 to 24 months?
I have stated this here in the past and would love some feedback. I agree that this debt (USG) is trash based on the financial condition of the US government, but is it any worse than Japan, Greece, Italy, etc. If Japan 10 year is at .6%, why wouldn't the US be there???
BTW, I do not believe the US government will, in any way, put up with rising rates. They will lie, cheat, monetize, create fictitous third parties in Belgium and point a guns at heads of Fed officials to get US Govvy rates to go as low as possible.
We will see 1% on the ten year before all this is over with. I don't know the time frame, but it is inevitable when you take all the unfunded liabilities into consideration. .Gov can not afford for rates to go higher, anything above 3.5% on the ten year and the system is toast.
Get to work Mr "Bowl Cut" Yellin!!!!!
That's much more difficult.
The Sequester and millionaire's tax increase of last January has erased issuance. There's less available for her to buy.
And she has $102 oil slowing everything. Printing won't touch oil.
YES. I've saying as much, here, for over six months. Add in a wrong-way $1 trillion+ bet by Wall Street (that needs to be fully unwound) and add in the possiblility of a risk-off phase (even a modest correction in US equities), and you have a near term catalyst for US 10yr rates to approach 2.0%.
In November last year, I went long the 7-9yr Treasuries heavily (over 50% of my portfolio) for the first time since early 2011. The set up this time reminds me of 2011.....when rates fell from over 3.0% to under 2.0%.
Got the felling you're right on 3.50, doc.
If it breaks that mark, might as well be 7%
The system can't support paying back the lie.
Now, if they could just shave another 100bps off to get it back down below the levels from before the yield blow out from a year ago, they might, just might be able to breathe some life back into the mortage market. Blow Janet, blow! Keep that housing bubble going through the summer!
And don't forget that the EE is still capping paper silver under 20/oz, and I wouldn't be surprised if by the end of today or this week the EE will have pushed paper gold back down under 1300/oz as well.
Well, so be it. Works fucking great for me though! I'll keep stacking phyzz Ag at these awesome, rock-bottom, once-in-a-lifetime, all-time fucking most undervalued lows for as long as these scumbags can keep fucking with the paper prices.
And you all should too! The SGR is still around 66:1
Check this latest by James Turk over at KWN:
Silver Is One Of The Best Buys On The Planet Today
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/5/12_Silver_Is_One_Of_The_Best_Buys_On_The_Planet_Today.htmlquote from Turk:
"There is one other point I would like to make about my review of commodity prices on the World Bank site. They actually include one other commodity with prices from January 1980 to the present -- silver. The eye-opening point is that silver is only 51 percent of its price 34 years ago.
How is it possible that silver can be so cheap given its use in so many new applications and the continuing drawdown of its above-ground stock? We all of course know the answer to that question because silver is part of the central planners’ scheme to keep the price of the precious metals as low as they can. Yet gold is 192 percent of its price at the end of January 1980. So why hasn’t the silver price risen at the same rate?
Some people will answer that question in a variety of ways, but to me there is only one answer. The price of silver is much easier to control than the price of gold because silver is a much smaller market, so paper derivatives can have a much bigger impact on silver. After all, one wealthy individual controlled the whole silver market by himself for a while leading to its price spike in 1980. So imagine what a group of governments and their bullion bank agents can do with their combined resources if they are intent on manipulating silver.
But regardless of the ongoing manipulation of the silver price, one obvious fact stands out from my comparison of commodity prices -- silver is very, very cheap. Silver is by far the cheapest of the 63 commodities I compared. That makes silver a tremendously undervalued asset and therefore one of the best buys on the planet today.” ~ James Turk
I hear you. But when silver was $8 was still a better rock bottom price than $19.
In nominal terms, maybe, especially if you bought then and haven't sold any phyzz yet. You're still in the ballgame bigtime, that's for sure.
But when silver was last at 8 bucks it was like mid-2008. And those dollars were very different dollars than the ones we're using now. They weren't much better, but you get my point.
.gov and the Fed hadn't yet embarked on their insane fiat print-fest. Multiple unknown Trillions upon Trillions hadn't yet been printed into existence by all the world's central banks all at once yet.
And in the last 6 years who knows how many Billions of ounces of silver have been destroyed...never to return again...all the while higher energy costs are making it harder and too expensive to mine and refine what little silver is still left in the Earth.
Now look where we are, and yet silver has been beaten back down to under 20 bucks, which may be 250% higher than 6 years ago, but like Turk states in his interview silver is currently a whopping 51% below it's all-time nominal high from 1980.
Silver should be priced conservatively around 135/oz today when adjusted for inflation from that high in 1980...that's not counting the other fundamental factors that greatly affect true price discovery.
And we were nowhere even remotely close back then to the economic troubles we're in today world-wide. The fundamentals are there for all to see...no one can argue with the numbers. But the Fed has been able to use unbelievable monetary powers to force silver to defy gravity in the face of all the glaring fundamentals.
Once paper is dead, real phyzz silver (as well as gold) are going to explode.
Do you know what another 250% gain in silver price from this level puts it at?
That only gets us back to that magic 50 bucks per ounce level once again. That's about 600% or so over the 8 dollar price from mid-2008, right? Most people would think, "not bad!" We'll all take those kinds of gains all day long. Of course, I don't think we should even be thinking of silver and gold in terms of worthless dollars, but that's a whole other deal I won't go into here.
Silver may have been a "good buy" at 8 dollars or any other price prior to this 20 dollar level. We can just ignore for now the run-up a few years ago from 20 to 49 all the way back down to 20 again today. But silver today is the deal of the century given where we're at and the fundamental facts surrounding the situation we all now know silver to be in since 6 years ago.
We all understand the manipulation now very clearly and yet silver is just sitting here at anywhere between 5 and 10 dollars per ounce BELOW the average cost of production that it takes to pay for the energy to dig it up, refine it, mint it, and ship it so that we can just stroll on into our LCS and grab a nice shiny tube of Buffs or Eagles for less than that cost of production.
If that's not the deal of the century then find me what is and I'll trade in my worthless fiat for some 'o that instead. Other than that, I think anyone is absolutely crazy not to be trading in a good chunk of their excess fiat right now for as much phyzz as they can get their hands on.
It could get supressed lower by the EE, but what's our downside risk, really? A buck or two? Hell, maybe they'll just drive the paper price to zero! But good luck finding any supply, right? Are the dealers supposed to just give it away? If they push silver much lower than 18 again we'll have massive supply shortages and premiums will naturally have to jump way up if we want to get anything in our hands.
Right now, right here we can still get supply and premiums are still cheap.
But this can't and won't go on for much longer as supply will continue to drain and eventually the Crimex will go bust.
Katy, bar the door when that day comes. The stampeded will be epic and so will the true price discovery before this is all said and done.
I feel very bad for those who can't or won't take advantage of this now. When the silver train leaves the station nobody will ever be able to catch it again. The vast majority will be left behind. I've certainly tried my best over the last 5 years or so to wake people up and get them stackin' phyzz. I'm disappointed in how many have completely ignored all the warnings. But I'm proud to know that I've converted 5 people to stackin' phyzz. At least that's 5 people who will hopefully make it out okay on the other side after the great monetary reset occurs and the dollar collapses.
We're a helluva lot closer to that day of reckoning now that we were back in 2008. Some say it could start to happen seriously as soon as 1 to 3 months. Some say it could be a year, 2, or 3. But it's sure as hell going to happen...we all know that's a given.
Edit:
And gee, wouldya take a look at this! After I finished writing all this up, look what I find at the top of ZH!
The Beginning Of The End Of Precious Metals Manipulation: The London Silver Fix Is Officially Deadhttp://www.zerohedge.com/news/2014-05-14/beginning-end-precious-metals-manipulation-london-silver-fix-officially-dead
I'd hit up your local LCS's today, folks! After this, the 2nd half of 2014 just might be epic.
Must. Reinflate. Housing. Bubble.
Taxation and Inflation, destroying the middle class one soul at a time.
In a free market, the rates on bonds issued by bankrupt western governments would be astronomical. We don't live in a free market, therefore the interest rates should go down.
Keynesian economics ftw!
Actually it's just politics, not economics. Raising the interest rates would force governments to slash spending and cut pensions. That's impossible, so it's much more likely they will run the printing presses 24/7 while lying about inflation so baby boomers are still paid the promised amount, but it doesn't buy much.
The other other irony is that low interest rates are bad for pensions. This forces them out of the bond market and into the stock market where they'll probably bet it all on GM and lose the entire pension fund when GM goes bankrupt again. Then the government bails out the pension. How? Run the printing press 29 hours per day!