The Meddler in Chief and world oil markets plus the PERFECT STORM in Bond markets.
Two givens. First oil IS the price of everything else from energy to transportation to packaging all oil domination in market spaces world wide.
Second the BOND market IS the cost of money for everything including oil reaching markets and that cost is soaring say 100x of what it was just last year at this same time.
Double cost impacting the market space, yes or no? You tracking the powers over the forces of every other thing?
Now yield curve you keep reading about or should have in bond costing – the price of money circulating – more or less – on bond pricing.
So over time yield curve tell us that 100% of the time we have a yield curve inversion we have a recession where growth and prosperity stop for the entire world. Why? What is yield curve?
TO help the press here:
Yield curve in the multi trillion dollar global annual bond markets – circulation of all money starts here – relates to two interest rate averages.
- The average for higher risk shorter term bonds of say 90 days or so in maturity paid off in 90 days. A market rate is set.
- The average of lower risk ten year bonds paid in ten years carries a higher interest cost due to time- than the short term.
An INVERSION occurs where the premium for ten year bonds is lower than the three year bonds or vice versa and the curve between the two charts inverts on interest rates to market – one normally higher is now lower and the other is higher – inversion.
The cause is typically the real economics. A recession slow down is coming. But not in 2018.
Today the yield curve is flattening into growth no recession in sight or indicators of a recession brewing world wide.
There is market concern about:
- Fed interest rate rising to create a false yield curve first time in history.
- Trade war creating a yield curve inversion by itself a first in history.
The yield curve flattening is occurring outside any prior chart or graph while the market suggests – a recession is coming without proof’s.
New frontier. Why?
The Fed bought 5 trillion of bonds from their bank customers during the horrible Great Recession that Fed Policy created with those same banks.
Now the Fed is selling those bonds – and higher interest profits them over time – in an experiment no one knows the outcome for. Examples:
- Can Fed policy to print free money by tens of trillions of dollars be normalized to market rate interest – and in what time frame – to not create a Fed policy error ( we say has already taken place ) by raising interest way too often – way too fast – way to high.
- Can the Fed at the same time it ceases to buy bonds – it ceases to offer free money anymore – also – sell five trillion dollars of its acquired “assets” back into an already stressed bond market space without market disruption – a yield curve inversion caused by the Fed actions while the market seeks to sustain solid growth from a weak global recovery by all our charts tracking?
Enter the Meddler in Chief. Seeing the problem he and his teams come out to moderate FED TIMING and to insert ( if he can do it ) the asset of TIME into normalization policy to preclude unwanted Super Crash and market melt downs also a possible outcome in the Fed first time ever – experiment with no model on how this test is going to work out for us all.
Next comes OIL the price of everything.
Oil is bid up to margins of 100x cost – 1000% profit Margins by a few greedy producers inside a fully criminal cartel. If you give crooks who manipulate oil prices artificially respect you are doing the entire world of 7 billion who face food security without lower oil price – 1.5 billion dying this year while the food is in wearhouses RIGHT NOW to save 100% of them from dying – but we humans inside failed economic systems we hold on too – are creating without a system upgrade – all this death. For no reason.
Enter the MEDDLER IN CHIEF. Mr. Tweet himself. He suggests:
- Like interest – oil is TOO HIGH to maintain global stability which if lost costs oil firms the most in pain for the longest period of TIME.
- And he suggests of the tens of billions of stored oil America has in reserve we might pinch some out to market to lower unfair Cartel price manipulations.
- The world is drowning in oil and price is a manipulation only.
So volatility in oil has been higher in 17 months than in 17 years. But wait for it……should only get much worse.
Spikes to 100 dollar oil a barrel could occur than back down 50 dollar range where I said it would remain and stay once the manipulation factor is reduced or removed which American production is doing all by itself – its arithmetic – just do the math.
COMMODITY – OIL
- Rising supply for 25 forward years
- Lower demand for 25 forward years – like off a click in five years
- Prices remain high by cartel phony price manipulation to markets
How long can that math last do you truly think?
Note oil has gone down for weeks and weeks setting a down record which to me suggests a huge political non economic up spike to plunge again in volatility like OIL is suggesting – you can’t seen nothing yet. I think as I have blogged it goes down to 50 range and stays there as it settles to market rate versus manipulation rates
With Meddler in Chief all over it – minds over money but it takes time.
The war is economic.
AI will reposition portfolio’s in the largest wealth management repositioning in living memory – by December pushing all wealth to new record highs without a black swan event also possible. Oil to play a role and bond pricing a role in whatever comes next as foundational economics. And you now know why.
Every nation is lining up to be Aligned and Cooperate or not align and remain competitive ( insane actually ).
Sanity is winning.
Insanity is economically dangerous – as nations – but dying off for self enrichment.
I see a new casino capitalism with speculation by AI software controlling 10,000 super money pools for the first time – with AI races and software wars every quarter racing to control 90 of all wealth and capital circulation in 2018 a first for human system modeling.
The economic outcome – is far from certain.
- Without enough TIME the system risk to failure due to 300 trillion in global debt is at a record in history – not a risk to miscalculate.
- With enough TIME ( the missing asset to economic planning today ) the outcome can be sustained global prosperity for decades truly.
One is sane the other is not …sane.
Why do we toy with insane outcomes?
Immediate greed gratifications by those who profit from the 90% control of all circulation.
A) They do not know they are insane and they believe their own lies to themsleves even – totally in a fog how what they cause creates the system melt down like 1929. Again.
B) They are not in their dilution economics teachable by those not diluted by their false economic theory model. Untested . They see risk-less risk moving forward – we see SUEPR RISK moving forward without a policy change.
So a regulatory global RE-THINK is required to preserve the system.
Without it – folks – the risk is far greater than yield inversion and you know why now.
BERNY DOHRMANN – Teaching what IS really truly going on…out there !