Tuesday the yield on the ten year hit 4.757%. Just three weeks ago the market would have a hissy fit plunge when it came close to just 4.3%
For months on end I’ve been suggesting that some form of credit market/debt market “event” was going to happen and if/when it does, all hell will break out. But, what could it be? The Japan carry trade collapse? A major bank has to “bail in” it’s depositors to save itself? A massive commercial real estate default? I don’t know which one, but something’s lurking out there.
Tuesday the yield on the ten year hit 4.757%. Just three weeks ago the market would have a hissy fit plunge when it came close to just 4.3%
For months on end I’ve been suggesting that some form of credit market/debt market “event” was going to happen and if/when it does, all hell will break out. But, what could it be? The Japan carry trade collapse? A major bank has to “bail in” it’s depositors to save itself? A massive commercial real estate default? I don’t know which one, but something’s lurking out there.
On a day to day basis, you can set your watch by the correlation. Yield pulls back a few tenths, and equities go higher. Yield rises, stocks fall. Lockstep. So yeah, our “system” is creaking and groaning.
October is known as the crash month. Is a crash coming? I don’t know, but I do know that there’s enough evidence that we’re in such bad shape, one could happen. The FDIC has said during meetings with their members that the banking system is fraught with banks “on the edge.” JP Morgan said that if rates keep rising at this pace “something will break.”
So, on one hand we have an economic system, that has been intentionally dismantled, crushing small business and the middle class. All by design, not accident. You all know the plan. Make things so horrid that the populace screams for a solution, and they serve it up via their digital currency and social credit system. On the other hand, we have the satanic maniacs that infest such places as the WEF, The Club of Rome, the Bilderbergers, WHO, UN, Counsil of 300, etc.
The escalating risk from the global destruction in collateral value of fixed-income securities in a highly levered economy is profoundly concerning. The very individuals who previously dismissed the lagging impact of falling bond prices within the banking system are now claiming that worries about a recession are widespread. Well yeah.
The world is interconnected in ways you'll never understand. There's multiple derivatives layered upon multiple derivatives and so on. In some cases, the original foundation asset isn't even known any more.
The bottom line is the debt market is the biggest market on earth, worth multiples of quadrillions. That's a number I cannot comprehend. But one thing is certain, an unusual default in one area, can cascade through multiple layers and traunches of this ponzi.
The incredibly sharp rise in the yield on the ten year, speaks to instability in the debt market. Well yeah, and it's going to get worse. The BRICS are here and there's no turning back.
In the "old days" we had the US as the strongest military, and our dollar was the supreme currency...needed by all. But we abused that privilege. We used it to make other nations toe our line. We sanctioned them. We killed them. There was nothing they could do.
But now there is................ Subscribe to continue reading