Notes From Underground: Is the Fed In a War?

I pose this question as a challenge to all of those traders and investors, and a call to action. There is so much discussion about the onset of inflation but do the inflationists have the fortitude to attack the FED where it hurts: the long end of the yield curve? The primary focus of the FED has been on the part of the QE purchases has been the shorter end as 80% of the FED‘s balance sheet is five years or less. If the inflation concern is of the magnitude suggested by the mainstream media then market participants OUGHT to be selling the longer duration Treasuries because as we know the Wall Street mantra is DON’T FIGHT THE FED.

If my assets were vulnerable to the negative effects of inflation there would be a need to protect by selling long duration Treasuries. This would FORCE the Powell FED to either RAISE FED FUNDS RATES OR ELSE INDULGE IN YIELD CURVE CONTROL IN AN EFFORT TO KEEP LONGER YIELDS FROM RISING. This is the market’s obligation, to CHALLENGE THE CURRENT STATE OF FED/TREASURY POLICY. The U.S. central bank maintains that inflation is TRANSITORY as short-term price increases are due to supply bottlenecks in raw materials and labor mismatches all caused by the covid pandemic. Once things normalize the short-term price pressures will abate.

If so, then the FED is correct and there is no need to change its present strategy of buying shorter duration assets in its quest to purchase $120 billion of Treasuries and MBS each month. The FOMC members continue to maintain that the concern is about the mismatch in jobs as the REAL UNEMPLOYMENT RATE (as measured by FED economists) remains elevated at roughly 9%. Remember that Chair Powell has reiterated his belief that FED policy remains as is until all those who lost jobs through NO FAULT OF THEIR OWN have been gainfully employed and most probably at higher wages. (I believe American private sector workers are in need of a pay raise as they have born the brunt of 25 years of capital flowing around the globe in search of low wage driven productivity gains, or as Tomas Picketty summed up, R>G.)

The increased concern about rising inflation flies in the face of the Powell/Yellen doctrine of creating enough jobs to right the wrongs of the jobs destroyed in response to the pandemic. Who is correct? I don’t know but if the FED‘s stance is sustained inflationists OUGHT to cause a steepening of the YIELD CURVE as it engages in market forces. The operative concern for investors is how high can 10- and 30-year yields rise before the FED reaches into its toolbox to find a way to curtail the rise in long-term yields.

This is of great importance because the market is heavily influenced by the ALGOs that use the 30-year yield as the key to trading myriad assets (equities, bonds, precious metals, foreign currencies). This is a very UNCOMMON outcome of the FED policy being at zero interest rates for the next two years. The 30-year has never been the determinant of asset values as the short-end/fed funds has been the KEY variable in gauging FED policy. If the FED was deemed to be BEHIND the CURVE raising short-term rates was the answer which would flatten the CURVE as the FED responded to market concerns about an overheating economy.

The FED has committed itself to realizing its FULL-EMPLOYMENT  MANDATE at the expense of TRANSITORY INFLATION. It’s time for the market to challenge the cental bank’s desire to rely on its beloved forward guidance. Making the FED uncomfortable is the market’s job, as well as causing as much pain to as many people as possible.

***There is continued concern about supply bottlenecks being the driving force of higher prices. There is some proof but I would caution that the greater force is the stockpiling of raw materials by the Chinese. In the Stanley Druckenmiller interview last week on CNBC, he cited the spring 2020 bond destruction, which resulted in the FED buying all types of DEBT was because FOREIGNERS DUMPED U.S. TREASURIES as the central bank embarked on a massive global liquidity enhancement program. (Think swap lines opened with many new foreign central banks and other efforts to slow the liquidation of assets.)

If DRUCKENMILLER is correct it would explain why raw materials began to rise well before the GLOBAL ECONOMY halted its dramatic contraction. The Chinese YUAN made its low on May 27, 2020 just as commodity prices were gaining their footing after the BLOOMBERG Commodity Index had dropped by more than 25% in three months. Even before the vaccine announcement in November, the BCI had rallied back almost 20% from its January 2021 high.

The inflation argument found in resulting supply shortages falls flat when you look at GLOBAL GRAIN markets, which experienced a 33% price increase even as Brazil and the U.S. produced BUMPER CROPS. Even though global economic growth improved grains, metals like copper were rapidly increasing in PRICE. If Druckenmiller is correct, the question needs to be asked: DID CHINESE SELLING OF U.S. TREASURIES LEAD TO THE CHINESE PURCHASING AND STOCKPILING REAL ASSETS IN AN EFFORT TO COMBAT THE FED’S DESIRE TO PROVIDE UNLIMITED LIQUIDITY?

Did the Chinese outwit the global actors in a quest to protect their paper assets? The answer may cause a shift in our views about the present rise in commodity prices. There was a Reuters article on Friday titled, “U.S. Tariff Review Considers Commodity Shortage, Inflation–Official.” This discussion is laughable for the U.S. imports almost zero commodities from China so why would that be the area of concern?

The strengthening YUAN would be a far better barometer of Chinese impact on global raw material prices. There’s lots to think about but watch the long-end of the yield curve to discern market action. If the FED chooses like Bartleby the Scrivner not to play then how STEEP can the yield curve go. When Paul Volcker was FED chair he INVERTED the yield curve to more than 600 basis points in an effort to crush inflation. How steep will the FED allow the CURVE to rise in an effort to hit its inflation target?

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43 Responses to “Notes From Underground: Is the Fed In a War?”

  1. Mike Temple Says:

    If inflation is merely transitory, will companies later rescind pay hikes and roll back price increases?

    For now, you are correct. Bond vigilantes not in any hurry to wreak havoc despite inflation breakevens moving higher.

    Another interesting cross current to consider is this.
    Why the sudden air pocket for BTC?

    I confess I don’t profess to understand if that is somehow connected, or simply selling off in sympathy with high beta tech stocks.

    I am much more concerned that German bunds are getting pasted and approaching the zero bound, but from below not above the surface.


  2. Yra Says:

    mike–it appears that the markets are just trading off the FED—several weeks ago there was an article in the FT in which President LaGarde warned the markets not to test the ECB—it seems that as long as all long yields are rising the ECB is not overly concerned–yet.Italy by picking Draghi has put the ECB and La Garde in a very difficult position .As I opined right when Draghi was chosen it was a brilliant pick for Draghi knows where all the skeletons are buried as he was the one with the pick and shovel—the BUNDS have not been the best short as the German/French spread on the ten year diff has widened out to 36 basis points from a 22 basis point level prior to the sell off in the European sovereign debt markets.The BUNDS will always command a premium because of their status as a High Quality Liquid Asset

  3. Judd Hirschberg Says:

    Mike, Bitcoin has been sold against Etherium for the past two years. (BRTI/ERTI) It has quickened it’s pace in 2021 to retest it’s opening range against Bitcoin on Friday. The pace quickened with the opening of CME Ethr contract. A lot of the volatility over the weekend has been attributed to Musk.

    Should be an interesting week.

    • David Richards Says:

      Yes, Musk has boosted the growing narrative among the influential SJW and ESG crowd that BTC is a dirty asset, a frivolous use of an enormous amount of energy and very bad for climate (versus something like air travel which is a dirty but non-frivolous use of energy). The crypto community argues it uses renewable energy. I won’t engage in that debate because it’s moot as all that matters is the narrative, whether it’s true or not. And the narrative is potentially toxic to private crypto. And now some sovereigns have begun piling on via their tax authorities.

  4. David Richards Says:

    Rather than attack the US long bond, which is “backed” by the printing press, why not simply attack the US dollar which is backed by nothing of persistent real value, and will continue to collapse (subject ofc to occasional upward reactions to temporarily oversold conditions), as US policymakers continue along the path that they’ve said they’re on. IMO it’s a high probability trade, where their use of the printing press is your ally, by devaluing the dollar, instead of a threat, by capping bond rates. Just be sure to use the technicals to let the market tell you the appropriate dollar trade levels.

    • david Says:

      Sorry if this sounds dumb but…what does one do such as myself who speculates in futures markets in dollar denominated products if say over the next 5-10 years the dollar loses…50% of it’s value for example? Would this mean all the profit made in dollar terms over that same time frame will be cut in half? Should that mean if one thinks dollar will be decimated, convert USD into something that has more promise? I’m not a currency trader but say, convert to pounds and start trading products denominated in the pound? Any thoughts would help enlighten me thanks!

      • David Richards Says:

        David, that’s a great thought, not “dumb”. If you’re spec’ing or investing or other things, indirectly you’re synthetically short the currency. So I think there’s no need to trade the product in terms of a different currency. Just keep trading it in terms of dollars.

        Using your example, suppose gold doubles from $1850 to $3700 whilst the pound simultaneously doubles from $1.41 to $2.82 (don’t hold your breath). The gold trade in terms of dollars has doubled, whilst the gold trade in terms of sterling is flat, but in the end, your value/wealth is the same – both ways you’ve doubled your wealth in terms of dollars.

        However, if leverage is employed, as often is the case when speculating in futures, then in the example above, it’s better to have made the gold trade in dollars. Because at say 5X leverage, you will have made a ten-bagger on the gold trading in dollars (5X a double), but still flat for the gold trade in terms of sterling and thus only double in terms of dollars that way. That’s because the gold trade in terms of dollars was synthetically short dollars, so your leverage paid off for you as the dollar declined in this example.

        Speaking of pound and gold, they’re near inflexion points now. IMO a weekly close higher from here would portend continuation, otherwise a potential retrace or reversal lower. Many commodities look stretched and in need of a healthy correction, except for oil and gold which I have as $1851 for the key weekly level on my chart.

  5. Financial Repression Authority Says:

    […] Link Here to the Blog Post […]

  6. Mike Temple Says:

    I agree with David Richards’ reply. Don’t sweat the inevitable sell off in USD. In fact, embrace it.


    The hairier and scarier things get for the US economy, markets and currency, the greater the profit opportunities will be during such chaos.

    For the truly nimble trader, especially those institutional ones who can buy and store “trading sardines”, stupendous profits will be had for the taking.

    Think of all the chaos in Latin America economies in the past 30 years. If you had access to capital, it was a target rich environment.

    Happy hunting

    • David Richards Says:

      Yes, but OTOH it might be prudent for foreigners who invest in the US do so an currency hedged basis.

      For example, I recently heard some Canadians at hedgeye bemoaning their lousy, negative returns from US equites, as USD/CAD has puked 20% for them since last year. IMO the dollar isn’t quite done falling yet but it’s also becoming due for a corrective technical reaction. If so, then foreign investors in the US should probably wait and hedge the currency risk afterwards.

      That was the modus operandi for awhile last decade when the Nikkei rose relentlessly and the yen kept falling, like in the US over the past year.

      Back in the 1970’s the dollar got bad enough for long enough that foreign investors refused US dollar bonds AKA “certificates of confiscation”, as hedging the currency became too expensive. Back in those days they didn’t monetize bonds like today when foreigners weren’t buying debt, so the Treasury issued bonds in Deutschmarks and CHF, in part to use the proceeds to buy dollars in the open market and help the buck.

      That era marked peak dollar pessimism and ofc was followed by Volcker and a strongly resurgent dollar. But as you pointed out, there’s no Volcker possible this time, as the US is no longer a creditor nation, and the US today cannot afford a Volcker-like rate hiking cycle nor perhaps any meaningful hiking cycle, so unfortunately your LatAm analogy appears more fitting. And of course not only for the US.

  7. kevinwaspi Says:

    Yra and all,
    Good points on the question of why don’t market participants dump the 30-year. My personal belief is that they are handcuffed to it in the repression of rates, it’s a self-fulfilling prophecy that started 12 years ago. I would suggest that the longest duration assets (equities of companies that don’t even have positive cash flow yet) should be dumped to zero long before the 30-year is even considered for sale.
    The belief that the Fed can cure all ills (notice their verbal interest in things such as climate change and “social equity”) is just more obvious example of academic HUBRIS that our great leaders are fraught with. Their actions have exacerbated the very ills they profess to want to “cure”, and their only fig leaf reaction is to claim that any inflationary signs are “transitory”, or the result of supply chain disruptions caused by the Wuhan Flu. I call Bull****!
    The bond market vigilantes were castrated 12 years ago, and no amount of regenerative hormone therapy will make those stones regrow. Sit back and watch the elite continue to profit, for as I’ve told you before we live in a time where, “Never before has so much been taken from so many by so few”. True asset plays will be among the small number of beneficiaries in this episode.

    • David Richards Says:

      Some blunt observations by Stanley Druckenmiller on cnbc last week, relevant to Kevin’s comments and printed in Zero Edge yesterday.

      “I don’t think there has been a greater engine of inequality than the Federal Reserve Bank of the United States so hearing the Chairman talking about visiting homeless shelters is very rich indeed.”

      “America’s deep divisions make the central bank’s independence crucial. Fighting inequality and climate change are very far from the Fed’s central mission.”

      “For the life of me I can’t understand why the left is so excited about money-printing when all the data shows that the people who benefit from money-printing are rich people.”

      “The odds-on bet is that we’re going to have inflation, and inflation is going to hurt poor people, again, a lot more than rich people.”

      “We’re going to monetize our debt and we’re going to enable more and more of this spending, that’s why I’m worried now for the first time that we lose reserve currency status and of course all the unbelievable benefits that have accrued with it.”

      “If they want to do all this and risk our reserve currency status, risk an asset bubble blowing up, so be it. But I think we ought to at least have a conversation about it … There is no one, no group, that will be hurt more by a bust than the poor. They will be first in line to get screwed.”

    • Yra Says:

      Prof.Waspi—-yesterday Larry Summers was quoted in a long bloomberg piece scolding the FED for its pivot to worrying about the financial impact of climate change—Summers is piquesd by inflation and believes the climate change is the pivot to provoke the hearts and minds of the woke and cancel crowd[my words] –again all Heil Chair Powell the Minister of Social Justice—-as he said in June,2016 about the guarantee of the ECB—they have a printing press left me numb but he is so far from Mr.Volcker and his daily war against GOLD–Powell feared markets while Volcker respected what markets were signaling

  8. kevinwaspi Says:

    Thank you David, I missed those pieces on ZeroHedge.

    • David Richards Says:

      Sure, you’re welcome, and also thanks to Mike Temple for first raising Druck’s interview on cnbc previously.

  9. Arthur Says:

    Yra + Stan = GREAT COMBO

    From CNBC…

    Druckemiller has entertained the thought that a challenge ($) could come from the crypto world. He said in the CNBC interview that the ultimate solution could be “some kind of ledger system invented by some kids from MIT or Stanford” though he conceded that “I don’t know what it will be.”


    Mar 9 Govcoins: Governments hate competition—currency monopoly

  10. Arthur Says:

    Jim Cramer: The Enlightening Billionaires – Druckenmiller and Tepper

  11. David Richards Says:

    “Stan Druckenmiller is doing a Balance of Payments analysis on the US. The Fed is not.

    “Akin to when the Fed was not analyzing mortgage derivatives but declaring “Subprime is contained” while investors that WERE analyzing mortgage derivatives were horrified.

    “Who was right then?

    “There is nothing the Fed can do to fix balance of payments of a country that is insolvent and is afloat only by keeping dual barrels of weaponized dollar/swift system and aircraft carriers to the temple of the world holding burning USTs as reserves?”


  12. Yra Says:

    From Yra:the biggest story of the day is that Biden and co.are removing the sanctions on NORDSTREAM 2—gee wonder what deak was made and why–probably have to do with Iran but Putin just played these foreign policy neophytes like Munich,1938.This is a huge story and the financial media is too bust sifting through the FOMC minutes—–again this is HUGE as it means something big in the works as the redo of Tiananmen Square and Chinese sanctions removed for UN Kuwait Invasion deal—yet again Sanctions are Sanctimonious and the White House foreign policy Squad means very little of what it says—everybody is watching and salivating

    • Pierre C Says:

      Isn’t there somewhere in the Longer Telegram calling for the US to realign themselves closer to Russia.

      • David Richards Says:

        In the longer term anything is possible, but IMO there’s no chance of a US-Russia alignment in my lifetime for many reasons on many levels in accordance with the best interests of Russia today (which btw is a great online news source, “Russia Today”).

        Perhaps the #1 insurmountable reason to any US-Russia alignment is that Russia has zero trust in the US due to Russia’s experience of the US breaking its word to Russia repeatedly in recent decades. For example, Russia and Putin are appalled how the US, contrary to its agreement with Russia, pushed deep into eastern Europe right up to Moscow’s doorstep under the cloak of NATO in contravention to their agreement, complete with WMD’s. The US was also keen to extend into Ukraine, a core issue to Russia.

        Accordingly, Putin has said of late repeatedly, “The US is non agreement capable”. That sums up Russia’s perspective on its relations with the US for this generation. Full stop.

        The agreement broken by the US with Russia over eastern Europe is comparable to the agreement broken by the US with China over the Province of Taiwan, a similarly core issue from the Chinese perspective. So likewise, no more trust exists there anymore either. As a consequence and in contrast, there’s no tighter or more trusted relationship anywhere in the world in 2021 than Russia-China, as is evident from their surging cross-border infrastructure buildup (new high-speed & conventional railways, huge oil & gas pipelines, and the new operational northern sea lane AKA Polar Silk Road from Qingdao to Rotterdam via Russia that bypasses potential US chokepoints), the recently signed joint Russia-China defense treaties and their increasing defense sharing/coordination. Brzezinski is spinning in his grave.

    • Arthur Says:

      From Geopolitical Calendar:


      Angela Merkel says Nord Stream 2 is no one’s business but Germany’s

      Mrs Merkel argues that EU institutions have no business intruding in a purely commercial enterprise.

      “Europe’s energy supply is Europe’s business, not that of the United States of America,” Germany’s foreign minister, Sigmar Gabriel, and Austria’s chancellor, Christian Kern, in a joint statement.

      • Arthur Says:

        “I would like to point out that the gas delivered through Nord Stream 2, which isn’t yet flowing, is no worse than the gas from Nord Stream 1, that which flows through Ukraine, and that which comes across Turkey from Russia.” Merkel

    • David Richards Says:

      Yra,.. or maybe it’s to improve mediocre US relations with Germany in order to help counter Russia and China, who has displaced the US as Germany’s top customer plus enjoys a much higher approval rating with German business for reliability and ease-of-business (per Der Spiegel as reported in SCMP). Nordstream sanctions weren’t helping the US image in Germany.

      So, notwithstanding that during his Senate hearing, Blinken committed to retain the Nordstream sanctions, it was already speculated by several last month that these sanctions would be cancelled. US sanctions were ineffective anyhow as Nordstream was guaranteed by Gazprom last month to be completed before the end of this year regardless of US sanctions.

      Plus US sanctions (or not) will be moot if the German Greens are elected in Sept (they currently lead the polls), as they’re expected to kill Nordstream like Biden killed keystone. Thus the US now has it both ways – ending the sanctions now improves poor US relations with Germany, and Nordstream gets killed in Sept anyway by the German Greens, who apparently are a tool of the US deep state. From April 3:

      • Yra Says:

        David—Greens are a long,long way from realiziing election results making then the lead group in any coalition—September is a galaxy far,far away.But you analysis is very cogent and needs to be considered in its wisdom but Blinken comes off as being soft in many ways–he says strident statements but walks everything back immediately like Taiwan–he is no Teddy Roosevelt but I don’t envy his position as he gets caught between the progressives and the moderates of both parties

  13. Pierre C Says:

    This was an interesting little read for me. Wage and price controls is another tool in the toolbox they have.

  14. kevinwaspi Says:

    Pierre C, No disrespect intended, but all of the tools ever created, or imagined cannot bring a corpse back to life. To believe that our monetary “Doctors” can do what no M.D. can is wishful thinking in my politest opinion.
    Remembering the horrible results of those W&P controls of fifty years ago gives me no confidence of that being an outlier outcome.
    HT to Yra for the WIN button mentioned in a previous blog. Keep it on your lapel my friend, it will become as common again as the stars & stripes worn by our technocratic leaders on their lapels today, as they drive this country into the ground. On the Nordstream 2 project as well as the rockets in Israel, you can bet on it. Our leaders are confident that they can bring “peace in our time”

    • Pierre C Says:

      kevinwaspi, no disrespect taken. I appreciate the feedback that I get on this blog.

      Let me run this by you,

      1. “The USD is not backed by anything”, What about the millions of people that wake up every morning, including “traders” chasing USD’s?
      We are the ones backing the USD with our blood, sweat and tears.

      2, The USD is on both sides of the balance sheets. Countries borrow in dollars and need dollars to pay back their debts.

      3. All currencies are derivatives of the dollar, so the dollar will be the last to fail.

      I follow Keith Weiner’s work at Monetary Metals as well as this blog, I’ve learned so much from both. Thanks to everyone who posts here!

      • Yra Says:

        Pierre–don’t know of Keith Weiner but if you think that traders are the backing of the Dollar be careful as Bitcoin has shown–good will and sentiment can change quickly—the US has to be a FIDUCIARY to sustain the Dollar’s status because there is no GOLD EXCHANGE STANDARD which ended with Bretton Woods—read Jacques Reuff The Monetary Sin of the West written in the 1960s

      • Pierre C Says:

        Yra, I will look up and read Jacques Reuff”s book.

        Understood, so traders and investors have the “option” to get completely away from the dollar. They can park their “money” in anything else while the system resets.
        Obviously they will need some dollars to pay bills and buy food in the meantime.
        Regular working people have less “options”. They can learn to grow food, buy old coins. Heck load up on Tide detergent, at one time it became a “drug currency. Tide and Kraft products. Quality still matters. The Buffet adage “Price is what you pay, value is what you get”.

        On another note, I think, Powell is laying the ground work for it’s own Cryptocurrency, Stable Coin.
        It’s a catchy name. Hey, have you got a stable coin I can borrow?

        Again, love reading the comments. I get more from this blog than any other news source I have access to.

      • Yra Says:

        Pierre—don’t go down the word of conspiracies as it will be a process –as the world moves away from the dolland again it is an IF because the US may regain its sense of being a fiduciary and change its behavior although the FED has made this a difficult task because of its NO EXIT strategy—-the Stable Coin may have more to do with where it is housed rather then the way it trades

      • Pierre C Says:

        Nothing moves fast, may take years to materialize.
        Thank you.

  15. Judd Hirschberg Says:

    Richard, great insight as always

  16. Arthur Says:

    Compared to pre-pandemic times, the U.S. is now producing around the same amount of goods and services with 8.2 million fewer workers

  17. Chicken Says:

    Free market. Central bank interests parallel government interests.
    “Turn green or lose licence to operate, says Deutsche Bank chief”

  18. Arthur Says:

    VIX v MOVE Index
    What do investors fear most? Inflation

  19. Yra Says:

    • David Richards Says:

      That’s paywalled. But it’s also here in the open:

      Bottom line is he believes the consensus is wrong in expecting the Fed will begin to tighten at all anytime soon.

      I agree. The consensus is looking to the past for clues about the future, expecting previous “normalization” cycles to repeat in the US. But it’s an entirely different scenario now for the US, which cannot possibly normalize without blowing up in the process of trying, not with the current unprecedented US balance of payments crisis combined with the US Federal debt at 140% of US GDP and rising fast (in contrast to only mid double-digits in previous post-crisis episodes).

      Further, listen to what the Fed is saying and what the Fed is doing. Two Thursdays ago after US stocks had “crashed” 4% off ATH’s and US yields double-topped to cyclical highs, the Fed quickly ushered in Yield Curve Mgmt (not full YCC yet which lies ahead).

      Then last Thursday, as the US repo market blew up again gravely threatening the functioning of the (insolvent) US Treasury market, the Fed moved to unlimited and direct purchasing of UST, essentially eviscerating the primary dealer role. An historic game changer.

      It’s the dawn of the US “Weimar” era, ushering in the last march to the end of the US, the same as for every other ex-empire that historically collapsed from grossly excessive overspending and indebtedness like the US today, who all attempted to inflate their way out. It’s always the same story because human nature never changes. And historically, nothing tears apart and destroys a society more than high inflation and its knock on effects – even deflationist Lacy Hunt wrote about that recently, and now it appears that the US has crossed the rubicon that Dr Hunt laid out as what in his opinion would mark the inevitable end: the Fed going direct to UST.

      Indeed, John Williams yesterday warned and forecast “US hyperinflation” ahead, possibly as early as 2022. It was in Zero Edge yesterday:

      • Judd Hirschberg Says:

        That’s a lot to contemplate and an exceptional post as the Long end rallies taking the Gold and Miners with it.

      • Yra Says:

        David –great retort and rebuttal .As Judd says much to contemplate here but it is important to watch Lacy Hunt as Andrew Perry continues to advise.Wait to be aware of Brainard and her thoughts on stablecoin

      • David Richards Says:

        Judd and Yra … Just to clarify, the Fed isn’t yet able to clear all UST’s directly but it’s pushing for that, which seems imminent to me especially after last week’s repo debacle (again). As described in Chris Whalen’s IRA article I linked above.

        And yes it’ll be interesting to watch Lacy Hunt about it, like in his quarterly Hoisington commentary next month. Will he ever wind up his UST bond fund because who wants that for the long run anymore? Maybe someone like David Rosenberg.

        As for gold, like many markets today, I think it’s near a big inflection pt or resistance inbetween the 2021 open and HDC. Let’s watch.

      • Judd Hirschberg Says:

        David 1910 was a point & Figure objective with the high 1920’s matching up with the .618 retrace for this move form the July 2020 high. I have an upper closing level breakout into 1950 with an eventual swing count to close to 2500.

      • David Richards Says:

        Yes, that 618 fib pt at 1923, I never mentioned cuz it’s technical but it lies around the top of my reistance zone, coincides with the old 2011 high and also the median line of the upward sloping pitchfork on my weekly soon, so lots of confluence slightly above the current price. Likewise, some currencies are close to key levels. So unless the dollar is as dead as dirt and gets blown away, one might expect to see a reaction soon that brings some better entry points later.

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