Posted on 04/04/2021 9:11:23 AM PDT by SaxxonWoods
Yardeni coined the phrase bond vigilantes in the early 1980s to describe investors who want higher yields for government bonds as compensation for rising inflation.
In this case, bond vigilantes are reacting to trillions of dollars in coronavirus aid pouring into the economy. They’re skeptical of Federal Reserve Chief Jerome Powell and Treasury Secretary Janet Yellen’s view inflation will be transient.
For now, Yardeni is in the transient camp.
(Excerpt) Read more at cnbc.com ...
And pour trillions in to corporations with “infrastructure” dollars.
Not really suggesting anyone dump their stocks for bullion. Lol.
A well diversified portfolio these days has everything in it. A little bit of this. A little bit of that. Pretty soon, you got a bunch of a bunch.
That’s how I retired early.
3% is super low. Crazy how people think 1-2% rates are normal
I have a large position in TBT which ultra-shorts the long bonds. It’s up a bunch and I expect it to go a lot higher.
Milton Friedman: inflation is purely a monetary phenomenon. As the amount of money in circulation increases higher than production, there will be inflation (Friedman, Money Mischief page 16). Increasing taxes lowers the amount of money in circulation, but causes prices to go up because of a decrease in supply (cost in the factors of production).
Prices are over inflated already and to prevent a depression the feds are “priming the pump” as Milton Friedman would say. We are long overdue for a reevaluation and nobody wants it on their watch.
More secret quantitative easing perhaps? Massive bubbles in the education and technology sectors? Wages are stagnant and in some places can’t keep up with property taxes and inflation.
But alas, that is the problem with government manipulation of the money supply. It changes incentives unnaturally causing people to make different economic choices than they would had it been earned the old fashioned way. And eventually there will be a correction
Read later.
Doomers can post their fear-porn below.
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High inflation is a given with Dementia Joe and company. Hyper? No one knows just yet. I remember Carter’s inflation in the 70,s, money markets were paying 12-14 percent. Do realize the world bought more Chinese bonds than US Treasuries the past few months, a historic event, not fear porn, fact. Dollar index hovering around 91, down from 120 a few years ago. Inflation, USD decline, high taxes a recipe for a crash.
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