These are strange times as US dollar, gold, and silver all tumbling today.
February 25 (King World News) – Peter Boockvar: Well, when the bond market wants to run, it’s going to run much faster than any central banker and that again is on full display today. Also, be careful what you wish for. Don’t spend all your waking hours to artificially suppress interest rates and then root for higher inflation because when the market thinks that inflation will come, it will run you over…
To hear Sean Boyd discuss $3,000 gold and the big game-changer
for the gold market CLICK HERE OR ON THE IMAGE BELOW.
I again will highlight what is going on with yields in Australia. After hiking rates by 40 bps in the two weeks ended yesterday, the 10 yr Aussie yield is up by another 12 bps today to 1.73%.
In your face QE. This yield was .97% on December 31st. The New Zealand 10 yr is spiking by 18 bps TODAY to 1.87%. It was .99% at year end.
European yields are jumping by 6-8 bps across the board. The German 10 yr bund yield in particular is higher by 6 bps to -.25%, the UK 10 yr gilt yield by almost 8 bps to .81%, the highest since January 2020.
The ECB, the central bank that did whatever it took but then went much further with NIRP and more and more QE in order to generate higher inflation, is now fighting the market’s belief on higher inflation. Following what Lagarde said earlier this week, ECB chief economist Philip Lane today said they are “closely monitoring the evolution of longer term nominal yields. We will purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions that is inconsistent with countering the downward impact of the pandemic on the projected path of inflation.” Hello Mr. Lane, the market has a different market view than you do and if you don’t like it, don’t make the desire for higher inflation the crux of your policy.
Now we know the Europeans have a big problem here because their governments have been feasting on the trough of no cost to funding their excessive debt loads, particularly the Italians. The Italian 10 yr is up 9 bps today.
The Bank of Korea overnight also said they are ready to fight the market if they feel it’s needed. BoK Governor Lee said “Now isn’t the time to discuss full normalization like a rate hike, because uncertainty surrounding the trajectory of the economy is very high.” There is one thing though that Lee acknowledged, “Higher yields may put pressure on stocks and property.”
This is all spilling back over to the US shores with the 10 yr US yield up to 1.46% and the 30 yr at 2.32%. Coming with this is a break in the US dollar index below the 90 level.
As I said a few days ago, higher rates and a weaker currency is what 3rd world government finances are made of.
In this audio interview Pierre Lassonde shares with KWN listeners around the world his top mining stock pick for 2021 that he has been aggressively buying as well as discussing where the price of gold is headed and why he is so bullish and you can listen to the interview now by CLICKING HERE OR ON THE IMAGE BELOW.
Also released! “Game Over” And We Are Seeing Shocking Levels Of Inflation CLICK HERE TO READ.
Also released! The Titanic Indicator For Gold’s Rapidly Rising Future CLICK HERE TO READ.
Also released! Liquidity Crisis In London Sends Gold & Silver Prices Surging CLICK HERE TO READ.
Also released! Greyerz: THE CLOCK IS TICKING – We Are Going To See Massive Wealth Destruction And The Greatest Transfer Of Wealth In History CLICK HERE TO READ.
Also released! Crisis Brewing In London As Gold Liquidity Dries Up – “No Liquidity At All…Whole Situation Extremely Precarious” CLICK HERE TO READ.
To listen to Alasdair Macleod discuss the shortage of available physical gold and silver in London and Zurich and what to expect next in the metals markets CLICK HERE OR ON THE IMAGE BELOW.
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