Hat tip to ZERO HEDGE once again (quickly becoming the truly insightful guest-post repository of the season) with Mike Krieger’s Seeing Past The Hologram. In case you see amazing similarities between this article and Lira’s in the previous post, just write it off to the bizarre consistency of reality.

I fully agree with his comment on the Treasury market as an indicator; basically, how can you extrapolate anything from a market where the Federal Reserve is buying its own government debt?

Well … we extrapolate that our central bank is buying its own government debt. That is an indication of what it is reacting to moreso than an indicator in and of itself. Bottom line: The Fed is corrupting US sovereign debt with securities fraud, as are other central banks across the globe. It’s all about CONfidence after all:

The confidence that is needed more than anything else today is two-fold. First, confidence that there is the rule of law and there will be the rule of law in the future. The second is that the money issued by the government will maintain its purchasing power over time. 

Neither Krieger, nor I, nor American businesses have any such confidence. Until we do, 99 weeks of soup coupons are in the mail. We surely agree that important moves have been made in the past week, but I like his take on FX market:

- with the Chinese yuan NOT strengthening and the yen threatening to break out we could be in for some major fireworks.  Meanwhile Japanese 10 year government bond yields have really started to spike lately (chart GJG10 Index on Bloomberg).  Something big is happening in the land of the rising sun.  In the back of my head I think that any panic move from the BOJ could be the spark that breaks government bond bubbles globally and ushers in a period of massive global commodity driven inflation as every country tries to devalue their way to prosperity. 

Here again, same conclusion - different trigger. So many different triggers – all the same conclusion.
Still only ONE SOLUTION.

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