Hi Slopers, it is silly season and the markets are levitating against my
short positions. The precious metals correction that NFTRH had
anticipated is well in progress. I remain long there. So, by extension
I must be pretty bummed out, yeh?
No freaking way. Momma always
told me to have patience… and a plan. I do, and if nothing else I
look on with a sort of comic bemusement (if that's possible) and await
resolution. Noise baby, noise.
Speaking of which, last year
during the deflation scare, somebody sent me a particularly good bit of
noise, the self-proclaimed "scariest gold chart in the world",
targeting gold at below 400. Now, it is easy to produce charts like
that during a deflation when there is little apparent chance of the
metal actually breaking to new highs, as it ultimately did a few months
later.
This is the kind crap that comes out and reinforces the
popular sentiment. Right now, that dynamic is going on in the markets
to the upside. Well, I will show you what I think is one of the
scariest charts in the world; the yield on Larry's 30 year bond.
See
the baby inverted H&S (green) that has already broken the neck
line? That targets close to 5.2%. If that target comes to be, then we
will have broken the neck line on big bro (blue) and its target of
6.8%. How do you think such a rise is going to play with the macro
wizards and their ability to sell US debt around the world? At best, I
could envision a self-reinforcing buyer's strike on US treasuries as
would-be buyers await maximum yields for buying the debt of the
hopeless and chronic inflator. At best.
