by John Galt
October 30, 2017 05:00 ET
Most individuals are laughing at the past, enjoying movies like “The Big Short” and ignoring what has happened in the past versus what is happening now.
Why do I say this?
The idiots who watch Fox Business, CNBS, or Bloomberg TV, read the Wall Street Journal or Financial Times and fancy themselves as “experts” on the markets. While anyone could have purchased an index fund or ETF in 2010 and held on for dear life for the bull market ride of a lifetime, the problem is now apparent that the music may well be about to stop.
Why is this and what two charts tell this story?
First the 10 year US Treasury yield for the past 10 years plus to January of 2007:
Thus despite the cries of the “experts” that this is it, the bond market rally is over, and all hell is about to break loose, the bond market has been and appears to be saying something far, far worse.
Will a crash happen soon? No way, I won’t claim that but I would not be shocked by a 2.45% yield with Dow Jones 25,000. Then again, there are the facts, reality, and history on my side.
I am by no way shape or form saying this “will” happen, but seriously I do think it already has happened.
Introducing Chart #2, the 10 Year US Treasury yield with my commentary inserted:
I am not by any reach claiming that I’ve had the big guy from above visit me and give me the market future, but the market past indicates that every time the bond yields rally higher, except after Obama’s reincarnation in 2012, we’ve seen a trend of continuous decline due to an actual lack of economic growth. The GDP figures from the past Friday sound great, but the reality is they are nothing more than the typical bureaucratic huff and puff of voodoo dust which reflect the stagflation many have worried about and soon will be reflected in the real inflation numbers of the 4th quarter.
The 10 year yield had best break substantially above the 2.50% mark within the next 90 days or else the equity and commodity crash which will follow will pale compared to the US Dollar index crash. Unless money starts moving out of the bond market in a substantial manner and the idiots in D.C. get their act together, odds are this house of cards will implode with little warning as the slightest of mistakes will cause a panic which craters the greatest bull market in the last 50 years.
Of course, since the market is still built on frauds and phony financial instruments leveraged beyond belief, we could see scenes like this again in many bankster board rooms: