THE BOND MARKET IS BURNING, AND ITS ABOUT TO BECOME AN INFERNO- TOTAL MELTDOWN. Mannarino
From Greg M
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Watching all the action in the Debt Market it is painfully obvious Central Banks ARE doing something, every moment of everyday.
Their interventions are ALL the markets have keeping all ‘prices’ way over-inflated.
It is when they Stop Intervening that all hell will break loose as markets correct to their Real Fair Values.
There are two sides to this. The Fed is inflating but globally still the best dirty shirt. My theory, on one side, is that as the world dedollarizes (Saudi pricing oil in other currencies, trade contracts between countries settled in their own sovereign currencies another example) the Fed needs a strong dollar to capture the remainder of the currency flow circulating around the world. They cannot pivot. They need a strong dollar to keep the global reserve status. On the flip side, at home in the US, the printing press along with self created supply restrictions, is inflating prices and necessities are skyrocketing but assets are deflating (stock market, real estate.) The strong global dollar will pull the remainder of the currency flow around the globe to our country as the escape hatch and the Fed hopes this will help stabilize the stock market and real estate as foreigners flee their own countries inflationary system. Deflation is the enemy of the Fed. But, that will be the end game regardless. (By the way, precious metals not only perform in inflationary times, but deflationary times as the deflationary event is a collateral crisis and precious metals in hand, not rehypothecated, are the best Tier 1 collateral even according to the Bank for International Settlements-BIS.)