TLT - Longer End 10/20/30 FlatteningSince 2002 when GSCO's Timothy Bitsberger's began his reign as Assistant Secretary of the Treasury.
Fiscal Fundings began to move down the curve to under 30 Months and accumulate a large concentration
within this timeframe.
It placed the burden of Government Finance up on the Short End of the Yield Curve near the region of control
for the Federal Reserve and their ability to drive Monetary Policy.
During the waning decades to today, the Bond Markets have become 11.2X the size of Equities.
Since 2008 we have witnessed a rapid acceleration in Money Stock, one which remains underreported then
(as the FED ceased reporting M2) to today where the very life blood of Credit Growth Velocity has dried up
and reversed.
TARP, TALF and the Yield Swaps accumulated $32 Trillion in Debt. 91% of the American Public was against these
Monetary Measure then.... Today they Gag for it as the Global Economy lays in ruin. Independent Producers have
been wrecked to the point, recovery is simply not viable.
The FED Minutes served to provide several references to moving up the Timeline for Tapering.
This provides cover for Powell's (we'll let ya know while we're thinking about thinking) as behind the scenes
they are preparing for short duration reduction in the usual suspects - RMBS, CDO, CDO, Corp Debt, Zombie
DEBT.
Yield Curve Controls became evident as the 1.71 10Yr yield was not permitted to be breached, had it and
Swaps would have been grossly offsides and created a large dislocation.
At present, The uncertainty over the impact of this Policy change - Potential Policy change - remain in Flux.
The Dollar, our target is 9465 ST, remains the wild card as the EU faces retribution for decades of abuse and
a failed attempt at Negative Interest Rates - the vote of Confidence ALWAYS flows to the Currency of Seniorege,
the US DOLLAR.
Capital Flows favor US Markets as China is making it extraordinarily clear, they are closing off the Monetary &
Economic Borders well in advance of the UNWIND coming to our shores.
A steepening or inverting yield Curve is immaterial. We crossed the Rubicon long, long ago.
As we witness the SPX to M2 Stock overthrow the .22 level - there is an important message there, extremely
important, which is why we suggested the ES would attempt an over-throw on Friday @ the 4441 level.
These actions ahead of Jackson Hole are significant.
More to follow within the 5 Part thesis beginning with ES/M2S, TLT, Divergences, Capital Flows and "Resurrections'
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