Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek Radio Nugget: John Embry and Chris Waltzek
By: radio.GoldSeek.com

AlphaZero for President
By: George Smith

Ira Epstein's Metals Video 12 14 2017
By: Ira Epstein

Asian Metals Market Update: December-15-2017
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver End Slightly Lower
By: Chris Mullen, Gold Seeker Report

Are You Ready For The Next Rally?
By: Craig Hemke

Long Term Patterns in Stocks, Gold and Crude
By: Gary Christenson

Exploration Update: Golden Arrow’s Pescado Project
By: Nicholas LePan, SilverSeek.com

GoldSeek Radio Nugget: Charles Hughes Smith and Chris Waltzek
By: radio.GoldSeek.com

Strap Yourself In - We Are About To See Some Big Moves In Metals
By: Avi Gilburt

 
Search

GoldSeek Web

 
Operation Twist By Another Name and Method?


 -- Published: Monday, 20 November 2017 | Print  | Disqus 

By Gary Tanashian

The TIP/IEF ‘inflation gauge’ is still motoring upward after breaking above the SMA 200. If this turns the 200 up along with the MA 50 it could indicate a mini hysteria about inflation.

tip/ief

The problem lately has been that the longest duration bonds have been relatively strong, putting a cap on yields and inflationary signaling, if not indicating deflationary pressure. TIP/TLT has not nearly kept up as 30yr yields have been a big drag over the last couple of weeks (this could still turn out to be a bottoming pattern though).

tip/tlt

Of course the Tin Foil Hat wearer in me wonders where some of this pressure might be coming from. Political and monetary authorities who have an interest in keeping long-term rates capped, maybe? Macro Tourist checks in with some details (last part of the article) about potential political shenanigans in the long-term Treasury bond market.

You Can’t Make This Shit Up

From WSJ:

The Treasury Department has unveiled a new strategy for managing federal debt that could ease pressures set to push up long-term interest rates and reduce a potential drag on the economy.

Under the plan unveiled earlier this month by Treasury, the department would increase the share of shorter-term debt issuance and reduce the share of longer debt issuance, ending a yearslong trend that favored long-term debt issuance.

Total issuance of government debt will still rise in coming years with growing federal budget deficits. As that supply increases, it is likely to weigh on bond prices, pushing up yields, which rise as prices fall. And Treasury yields influence other household and business borrowing costs throughout the economy, such as on mortgages and corporate bonds.

The Treasury’s new approach will shift some of that upward pressure on yields to shorter-term debt and away from longer-term debt.

That last sentence is key. What again was Operation Twist’s main goal as stated by the Fed itself? To “sanitize” inflation by driving up short-term yields and holding down long-term yields by selling and buying these maturities, respectively.

Call it what you will, but it is another proposed form of bond market manipulation and whether or not 30yr yields get to the Continuum’s limiter nearer-term, it could actually serve to aid our longer-term plan, which is for said yields to be limited at around 3.3%!

tyx

The greater point is that these manipulators can look at a chart just like you and I. They can see that something (bond yield secular decline) has been in place for decades and that something else (secular financial/economic growth) is probably dependent upon it.

Operation Twist’s goal was to sanitize inflation and by another method (issuance as opposed to bond selling and buying) the same effect seems to be getting schemed up at the Treasury department. I mean, the Fed is tapering out of QE, so they can’t very well literally implement Op/Twist Part 2, part of which required balls out buying of long-term debt.

On the macro view, the implication of the new scheme is for a flattening of the yield curve, except that… this…

yield curve

Operation Twist got the party started to begin with, years ago at a very elevated and dire yield curve level. How far does Mnuchin plan to cut the meat to the bond manipulation bone? What will be its efficacy? Does anyone really have a method of quantifying the effects now that we’re years into uncharted territory of bond market manipulation? I have few answers, but lots of questions. I don’t think the bond schemers have answers either, and that’s scary when you think about it. They seem to be just kicking the proverbial can.

The yellow shaded areas on the 10-2 yield curve chart above are the economic booms, inflationary or otherwise. The white areas with the curve steepening? Not so much. Treasury’s plan seems pretty desperate given that the boom is indicated to be latter stage.

NFTRH.com and Biiwii.com

 


| Digg This Article
 -- Published: Monday, 20 November 2017 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.