Yield explosion
The yield curve is still in a bear market.
Downward trending resistance at 3.1%
Once that is broken, it could easily go up to 7% which will act as a magnet due to it being a historical support line (1973-1992) and resistance (1992-2000).
This would be disastrous for the US government as interest on debt would rapidly rise.
More fundamental reasons of why the yield curve would go up is off course the US debt which is absurdly high.
There is no reason for lenders to keep lending at these low yields.
Russia stopped doing it and sold all US treasuries, China stopped doing it and now that the babyboomers are retiring they are stopping as a buyer as well.
Soon only the fed will be a buyer of these bonds.
Long term up is the only way to go for yields and the road is open until 7%.
This would cause a panic since the US will have it very difficult to service the debt without creating more bonds, enlarging the supply.
Very good news for gold (65% of the monetary reserve of the US) which could be doing extremely well just as it did in the 1970's
Downward trending resistance at 3.1%
Once that is broken, it could easily go up to 7% which will act as a magnet due to it being a historical support line (1973-1992) and resistance (1992-2000).
This would be disastrous for the US government as interest on debt would rapidly rise.
More fundamental reasons of why the yield curve would go up is off course the US debt which is absurdly high.
There is no reason for lenders to keep lending at these low yields.
Russia stopped doing it and sold all US treasuries, China stopped doing it and now that the babyboomers are retiring they are stopping as a buyer as well.
Soon only the fed will be a buyer of these bonds.
Long term up is the only way to go for yields and the road is open until 7%.
This would cause a panic since the US will have it very difficult to service the debt without creating more bonds, enlarging the supply.
Very good news for gold (65% of the monetary reserve of the US) which could be doing extremely well just as it did in the 1970's
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.