@jmski52 said:
Why did the rates on long bonds go up when the Fed dropped short term rates faster than any time in recent history?
Thats not true. The Fed cut more in 2020 and 2008 and 2001 and 1991. But what you witnessed is just the yield curve normalizing. The 10 and 30 year yields are the same (lower) as they were almost 2 years ago...when the Fed funds rate was 100bps higher. Long rates have not gone up.
>
It looks obvious to me that when the Fed pumps more fake money into the system, the market has caught onto the actual cause of inflation. There's no justification in a small cabal of bankers being allowed to manipulate the bond market.
End the Fed. Let the market solve the problems of misallocation of assets. It might get ugly but it won't be nearly as ugly as the control system that the bankers want to implement.
End Congress. Stop the excessive spending (fraud waste and abuse) that creates inflation and makes the FEDs job much more difficult. Let the market allocate assets to worthwhile projects. Its the congress folk that like this system as it gives them the power.
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Bring back true capitalism.
Central planning of the economy (by the Federal Reserve) is not capitalism.
That doesn't really say anything about safe haven money going into bonds, because the article was posted before Israel struck Iran.
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2 irrelevant terrorists striking each other. In the real world we would call that a "Nothingburger™" RGDS!
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When the news first came out that Israel had made a large coordinated and sophisticated attack against Iran, nobody knew how big the conflict might get (and we still don't). But it was the biggest military action between the two so far. The natural reaction of people upon hearing the news was to look for a safe haven. Bonds didn't move. Gold is where people went. Demand for US Treasury bonds did not change. Gold was bid higher. That is the fact.
@jmski52 said: Thats not true. The Fed cut more in 2020 and 2008 and 2001 and 1991.
Oh, but it is true. I didn't say "more", I said "faster". I said that the Fed raised rates faster (in a shorter length of time), not more, than at any time in recent history.
And thats still not true. The FEd cut faster in 2020, 2008, 2001 and 1991.
So answer my question, why did long bonds go up (almost a whole point) when the Fed was manipulating the short end of the bond market down?
Rates did not go up a point. They are actually a bit lower than almost 2 years ago when Fed Funds was 100 bps higher. Your narrative peddlers are asking the wrong question. They should be asking, Why in Sept 2024 when the Fed was about to cut rates from 5.25 to 4.75 was the 10 year bond trading at 3.6%. What were long rates 150 bps below Fed Funds?
End Congress. Stop the excessive spending (fraud waste and abuse) that creates inflation and makes the FEDs job much more difficult. Let the market allocate assets to worthwhile projects. Its the congress folk that like this system as it gives them the power.
End the Fed. If the banking lobby hadn't corrupted Congress, the overspending would result in bond defaults and the corrupt officials would be run out of town when they had to raise taxes as a result of the bond default.
Lol. Congress on their wn doing spends.more money because they want to keep their fat behinds in power. No other reason.
The way things operate right now, one hand washes the other and nobody is ever held accountable. Except that taxpayers and bank depositors become the bagholders every time, and only once in a blue moon does a banker or a politician go to jail.
What I was getting at is the fact that the Fed had raised rates from almost zero in 2022 to over 5% by mid-2023 after 30 years of declining rates, and that the recent cuts of 1% in mid to late 2024 have been generally ineffective and long bond rates still rose.
Which is not good when the Treasury has to roll over or create how much this year. $10 trillion or so?
So hold them accountable
Okay, how do YOU propose to hold them accountable?
Q: Are You Printing Money? Bernanke: Not Literally
What I was getting at is the fact that the Fed had raised rates from almost zero in 2022 to over 5% by mid-2023 after 30 years of declining rates, and that the recent cuts of 1% in mid to late 2024 have been generally ineffective and long bond rates still rose.
Since their peaks.in late 2023, the 5yr treasury yield is almost 90 bps lower, the 10 year nearly 50 bps lower and the 30 year about 25 bps lower.
Rates only "rose" because they had dropped so much in the 3 months preceeding the Fed cut. They simply rebounded to where they were before the cut and where they had been a year earlier. Long rates are about the same today as they were 3-4 months before the first rate cut in Sept 24. The rate curve normalized. Thats all.
Which is not good when the Treasury has to roll over or create how much this year. $10 trillion or so?
Right, we the people will incur greater debt as a result of higher interest cost. Eventually that poses constraints on economic growth...but right now it is an economic stimulus.
Powell's term is over in 11 months. Will the new guy bow to the kings demands and lower rates?
So hold them accountable
Okay, how do YOU propose to hold them accountable?
Educate the voting populace with fact, not twisted political based opinion, fear mongering or polyanna narrative.
". . . a looming avalanche of debt refinancing will gradually weaken the US dollar over time and deliver a potent tailwind to hard assets such as gold, silver, and other commodities."
No Way Out: Stimulus and Money Printing Are the Only Path Left
Those in power would love to see the Fed drop rates to 2% thinking they could issue 10-30 year debt at 2.5%. They are dummies as a drop in short term rates would drive longer term rates higher. Don't be a dummy too.
Gold has gone nowhere in the last 3 months. It has tried 3 times to go up beyond $3,400 and stalled out. Without some new catalyst, it is losing interest. Chinese buyers have started moving to platinum for jewelry as gold is "too expensive".
My guess, is gold will not make another attempt at $3,400-3,500 until debt ceiling increases, expanded government spending, or other negative financial news shows up. The pops from geo-political events are short-lived.
gold will not make another attempt at $3,400-3,500 until debt ceiling increases, expanded government spending, or other negative financial news shows up.
Coming soon to a place near you.
Q: Are You Printing Money? Bernanke: Not Literally
Last 5 days the dollar index is down to 3-year lows and gold also dropped. The inverse correlation is not working. Gold would be down, even more if not for the dollar drop. People want stocks and are Ignoring the debt.
@Goldminers said:
Last 5 days the dollar index is down to 3-year lows and gold also dropped. The inverse correlation is not working. Gold would be down, even more if not for the dollar drop. People want stocks and are Ignoring the debt.
@Goldminers said:
When the new big, beautiful, debt budget passes, (possibly on the 4th of July), will we get a surge in PM prices and another dollar index drop?
Is this a short-term buy trading opportunity?
This is not a political post at all - simply an economic discuss of a potential event...
What if the bill doesn't pass? With the SALT limits going away, the marriage penalty coming back and the rates re-setting, the Feds will be adding millions onto the tax roll and collecting billions more.
@Goldminers said:
When the new big, beautiful, debt budget passes, (possibly on the 4th of July), will we get a surge in PM prices and another dollar index drop?
Is this a short-term buy trading opportunity?
This is not a political post at all - simply an economic discuss of a potential event...
What if the bill doesn't pass? With the SALT limits going away, the marriage penalty coming back and the rates re-setting, the Feds will be adding millions onto the tax roll and collecting billions more.
Impact on the PMs?
Sounds like communist propaganda to me. Semper! THKS!!
@Goldminers said:
When the new big, beautiful, debt budget passes, (possibly on the 4th of July), will we get a surge in PM prices and another dollar index drop?
Is this a short-term buy trading opportunity?
This is not a political post at all - simply an economic discuss of a potential event...
What if the bill doesn't pass? With the SALT limits going away, the marriage penalty coming back and the rates re-setting, the Feds will be adding millions onto the tax roll and collecting billions more.
Impact on the PMs?
Do budget bills ever not get passed?
There is a very nice (ugly) upward trend in deficits since 2015--aside from the Covid spikes in 2020 and 2021. We have probably passed the time of even thinking the deficit will ever be less than $1 trillion per year. Taxes will never be lower than they are now. Deficit spending is beginning to go parabolic. PMs may or may not respond as you (we) think.
@Goldminers said:
When the new big, beautiful, debt budget passes, (possibly on the 4th of July), will we get a surge in PM prices and another dollar index drop?
Is this a short-term buy trading opportunity?
This is not a political post at all - simply an economic discuss of a potential event...
What if the bill doesn't pass? With the SALT limits going away, the marriage penalty coming back and the rates re-setting, the Feds will be adding millions onto the tax roll and collecting billions more.
Impact on the PMs?
Do budget bills ever not get passed?
There is a very nice (ugly) upward trend in deficits since 2015--aside from the Covid spikes in 2020 and 2021. We have probably passed the time of even thinking the deficit will ever be less than $1 trillion per year. Taxes will never be lower than they are now. Deficit spending is beginning to go parabolic. PMs may or may not respond as you (we) think.
RedneckHB.... I tend to agree with you on this. A disturbing trend. Unfortunately my predictive abilities are not that good for what it means for the future. In other words... how will the precious metals be affected, 401k's etc, ... and where does one invest in?
@Goldminers said:
When the new big, beautiful, debt budget passes, (possibly on the 4th of July), will we get a surge in PM prices and another dollar index drop?
Is this a short-term buy trading opportunity?
This is not a political post at all - simply an economic discuss of a potential event...
What if the bill doesn't pass? With the SALT limits going away, the marriage penalty coming back and the rates re-setting, the Feds will be adding millions onto the tax roll and collecting billions more.
Impact on the PMs?
Do budget bills ever not get passed?
There is a very nice (ugly) upward trend in deficits since 2015--aside from the Covid spikes in 2020 and 2021. We have probably passed the time of even thinking the deficit will ever be less than $1 trillion per year. Taxes will never be lower than they are now. Deficit spending is beginning to go parabolic. PMs may or may not respond as you (we) think.
I think we are in an interesting time. Fundamentally I don't think Trump likes deficits and this bill, projected to add $4.1trillion over the next 10 years. This means deficits under a trillion dollars, significant economic growth, holding down growth in entitlement spending AND the Republicans holding the House and Senate in 2026.
The longer I live the more convincing proofs I see of this truth, that God governs in the affairs of men. And if a sparrow cannot fall to the ground without His notice is it possible for an empire to rise without His aid? Benjamin Franklin
I think we are in an interesting time. Fundamentally I don't think Trump likes deficits and this bill, projected to add $4.1trillion over the next 10 years. This means deficits under a trillion dollars, significant economic growth, holding down growth in entitlement spending AND the Republicans holding the House and Senate in 2026.
The bipartisan CBO forecast is for annual deficits to increase from $1.7T in 2026 to $2.5T by 2035. The USG debt is going to increase from today's ~ $37T by more than $20T in the next 10 years, best case. I don't think you fully understand the CBO forecast. The $4.1T in deficits are added to the baseline annual deficits which are not going below, or anywhere close to $1T any time soon.
More significantly, current deficits (almost $2T annually) as a percentage of GDP (~$30T) are running at 6%, and not expected to deviate much, while growth (currently 1.5% and optimistically may yield 2-3% in a stronger economy) is half the rate of the annual debt increase. What you end up with is a mathematical problem of runaway exponents - making it impossible to grow your way out of debt Wouldn't be an issue at all if the economy grew at 3% a year and the debt also increased at 3% (around $900B a year).
When was the last time the CBO was correct? It certainly was not accurate with the Inflation Reduction Act. The CBO bends numbers to fit a narrative. I'm not saying everything is rosy, but I know for sure I won't follow the CBO forecasts in determining my investment opportunities.
@psuman08 said:
When was the last time the CBO was correct? It certainly was not accurate with the Inflation Reduction Act. The CBO bends numbers to fit a narrative. I'm not saying everything is rosy, but I know for sure I won't follow the CBO forecasts in determining my investment opportunities.
So CBO forecasts don't include many unknowns, so yes they are typically off by a lot whether it's 911, Great Recession, Covid, etc, piling on even more debt that wasn't forecast. One thing is certain, their forecasts are almost always rosier than reality (regardless of administration) because of optimism on growth, interest rates, etc.
Comments
.
Bring back true capitalism.
Central planning of the economy (by the Federal Reserve) is not capitalism.
.
.
.
And thats still not true. The FEd cut faster in 2020, 2008, 2001 and 1991.
Rates did not go up a point. They are actually a bit lower than almost 2 years ago when Fed Funds was 100 bps higher. Your narrative peddlers are asking the wrong question. They should be asking, Why in Sept 2024 when the Fed was about to cut rates from 5.25 to 4.75 was the 10 year bond trading at 3.6%. What were long rates 150 bps below Fed Funds?
Lol. Congress on their wn doing spends.more money because they want to keep their fat behinds in power. No other reason.
So hold them accountable...or are we weak?
Knowledge is the enemy of fear
My mistake.
What I was getting at is the fact that the Fed had raised rates from almost zero in 2022 to over 5% by mid-2023 after 30 years of declining rates, and that the recent cuts of 1% in mid to late 2024 have been generally ineffective and long bond rates still rose.
Which is not good when the Treasury has to roll over or create how much this year. $10 trillion or so?
So hold them accountable
Okay, how do YOU propose to hold them accountable?
I knew it would happen.
Since their peaks.in late 2023, the 5yr treasury yield is almost 90 bps lower, the 10 year nearly 50 bps lower and the 30 year about 25 bps lower.
Rates only "rose" because they had dropped so much in the 3 months preceeding the Fed cut. They simply rebounded to where they were before the cut and where they had been a year earlier. Long rates are about the same today as they were 3-4 months before the first rate cut in Sept 24. The rate curve normalized. Thats all.
Right, we the people will incur greater debt as a result of higher interest cost. Eventually that poses constraints on economic growth...but right now it is an economic stimulus.
Powell's term is over in 11 months. Will the new guy bow to the kings demands and lower rates?
Educate the voting populace with fact, not twisted political based opinion, fear mongering or polyanna narrative.
Knowledge is the enemy of fear
Gundlach gave a good interview on Bloomberg. Says that gold is the place to be, not bonds.
I knew it would happen.
But he's ready to buy when price is right?
Knowledge is the enemy of fear
He can't justify buying high yield bonds now, and he's talking long term, not much in the short term - and not necessarily in the US.
I knew it would happen.
You will see lower rates before then.
No Way Out: Stimulus and Money Printing Are the Only Path Left
So buy bonds?
Knowledge is the enemy of fear
buy oil (USO)
when bombs start flying, start buying.
No Way Out: Stimulus and Money Printing Are the Only Path Left
Quite the swing in prices today.
Knowledge is the enemy of fear
Getting The Fed To Cut Rates & What It Means For Gold
". . . a looming avalanche of debt refinancing will gradually weaken the US dollar over time and deliver a potent tailwind to hard assets such as gold, silver, and other commodities."
No Way Out: Stimulus and Money Printing Are the Only Path Left
Those in power would love to see the Fed drop rates to 2% thinking they could issue 10-30 year debt at 2.5%. They are dummies as a drop in short term rates would drive longer term rates higher. Don't be a dummy too.
Knowledge is the enemy of fear
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Gold has gone nowhere in the last 3 months. It has tried 3 times to go up beyond $3,400 and stalled out. Without some new catalyst, it is losing interest. Chinese buyers have started moving to platinum for jewelry as gold is "too expensive".
My guess, is gold will not make another attempt at $3,400-3,500 until debt ceiling increases, expanded government spending, or other negative financial news shows up. The pops from geo-political events are short-lived.
My US Mint Commemorative Medal Set
gold will not make another attempt at $3,400-3,500 until debt ceiling increases, expanded government spending, or other negative financial news shows up.
Coming soon to a place near you.
I knew it would happen.
Last 5 days the dollar index is down to 3-year lows and gold also dropped. The inverse correlation is not working. Gold would be down, even more if not for the dollar drop. People want stocks and are Ignoring the debt.
My US Mint Commemorative Medal Set
Weaker dollar....tariffs....fiscal irresponsibility.. .what inflation?
But hey, "we're gonna end inflation and make America affordable again".
Rofl
Knowledge is the enemy of fear
A strong move in oil is like we had with Russia-Ukraine. This was nothing.
,> @GoldFinger1969 said:
yet.
No Way Out: Stimulus and Money Printing Are the Only Path Left
When the new big, beautiful, debt budget passes, (possibly on the 4th of July), will we get a surge in PM prices and another dollar index drop?
Is this a short-term buy trading opportunity?
My US Mint Commemorative Medal Set
This is not a political post at all - simply an economic discuss of a potential event...
What if the bill doesn't pass? With the SALT limits going away, the marriage penalty coming back and the rates re-setting, the Feds will be adding millions onto the tax roll and collecting billions more.
Impact on the PMs?
Sounds like communist propaganda to me. Semper! THKS!!
Do budget bills ever not get passed?
There is a very nice (ugly) upward trend in deficits since 2015--aside from the Covid spikes in 2020 and 2021. We have probably passed the time of even thinking the deficit will ever be less than $1 trillion per year. Taxes will never be lower than they are now. Deficit spending is beginning to go parabolic. PMs may or may not respond as you (we) think.
Knowledge is the enemy of fear
RedneckHB.... you may be right. Really kinda disturbing. > @RedneckHB said:
RedneckHB.... I tend to agree with you on this. A disturbing trend. Unfortunately my predictive abilities are not that good for what it means for the future. In other words... how will the precious metals be affected, 401k's etc, ... and where does one invest in?
When the new big, beautiful, debt budget passes, (possibly on the 4th of July), will we get a surge in PM prices and another dollar index drop?
I think it starts happening all over again once they raise the "debt ceiling" Welcome to Weimar.
I knew it would happen.
I think we are in an interesting time. Fundamentally I don't think Trump likes deficits and this bill, projected to add $4.1trillion over the next 10 years. This means deficits under a trillion dollars, significant economic growth, holding down growth in entitlement spending AND the Republicans holding the House and Senate in 2026.
The bipartisan CBO forecast is for annual deficits to increase from $1.7T in 2026 to $2.5T by 2035. The USG debt is going to increase from today's ~ $37T by more than $20T in the next 10 years, best case. I don't think you fully understand the CBO forecast. The $4.1T in deficits are added to the baseline annual deficits which are not going below, or anywhere close to $1T any time soon.
More significantly, current deficits (almost $2T annually) as a percentage of GDP (~$30T) are running at 6%, and not expected to deviate much, while growth (currently 1.5% and optimistically may yield 2-3% in a stronger economy) is half the rate of the annual debt increase. What you end up with is a mathematical problem of runaway exponents - making it impossible to grow your way out of debt Wouldn't be an issue at all if the economy grew at 3% a year and the debt also increased at 3% (around $900B a year).
When was the last time the CBO was correct? It certainly was not accurate with the Inflation Reduction Act. The CBO bends numbers to fit a narrative. I'm not saying everything is rosy, but I know for sure I won't follow the CBO forecasts in determining my investment opportunities.
So CBO forecasts don't include many unknowns, so yes they are typically off by a lot whether it's 911, Great Recession, Covid, etc, piling on even more debt that wasn't forecast. One thing is certain, their forecasts are almost always rosier than reality (regardless of administration) because of optimism on growth, interest rates, etc.