I first touched on this topic last week:
“So that’s what I’m working with. All three asset classes look overbought to me: bonds, gold and the Euro/CHF, and I suspect that their rallies are related and associated in traders’ minds with recent Fed and Treasury actions.”
Today the dollar is rallying strongly against other currencies and gold, [...]

December’s themes have been ‘quantitative easing,’ the ‘bond bubble,’ and the resumption of the dollar crisis. It seems as though reaching the $9 trillion bailout figure and ZIRP (Zero Interest Rate Policy) triggered some more recognition of Bernanke’s plan to destroy the currency. This helped to spur a rally in Euros, Swiss Francs and gold, [...]

Here’s a two-year view of my proxy for the US 30-year Treasury bond, TLT:

Source: Yahoo! Finance. Click to enlarge.
It seems as though the mother of all Treasury rallies has run out of steam for now. I’m stepping in to play a possible correction, with a target exit range of 100-105 on TLT, corresponding to about [...]

This is deflation, a contraction of money and credit. Hardy anybody argues about that anymore. So what happens next? Will Obama and the bailout maniacs inflate a new bubble in green energy in their new, green deal? Maybe, but it would only be a limited bubble, not the worldwide craze in any and all non-dollar [...]

The 30-year yield closed at 3.91% today, in a massive compression of the yield curve, a movement that has a lot of room left to run. Way back on August 8th (day 4 of this blog), I wrote the following in “That crazy, crazy bond market: a call for sub-3% long bonds”:
I predict that the [...]

Here are a couple of charts that illustrate the significance of what the Fed has undertaken lately. First, look at the change in its balance sheet this year from about $870 billion, almost all in Treasuries, to $1.5 trillion, with fewer Treasuries, more repos and swaps, and an alphabet soup of new credit facilities:

Source: Federal [...]

Bottom line: Bailouts will waste our savings and remaining credit, and exacerbate the flight of capital and talent from the US.
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I was extremely surprised on Monday when the House rejected the first version of the Crime of ‘08, but I remain certain that an essentially identical bill will become law. When it does, maybe as [...]

This is still a Goldilocks economy?
Many standard fear gauges remain near their most elevated levels of the bust so far. From highly emotional conditions like these, we should expect a big move in equity prices. The question is whether the next emotion is relief or all-out panic.
If the fundamentals were not so horrible and stock [...]

Crash Proof vs. Conquer the Crash
I was thrilled to see Peter Schiff on Bloomberg TV this afternoon, since I knew he’d be all fired up and really let loose on the bailout. I was not disappointed, as he advised Americans to get all of their assets out of the country, and, maybe in a slip, [...]

This little provision was slipped into the bailout bill (published on nytimes.com):
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
The last raise was only in July, [...]