The article SIGNS OF A TURN IN THE DEBT MARKET
posted on the site on the 30th October turned out to be prescient (timely) because it called for a rally in bonds and Treasuries, a drop in the dollar and a recovery in the stockmarket, all of which we can since seen in a quite dramatic manner with the dollar dropping hard yesterday.
In this update we will confine ourselves to looking at the latest chart for TLT because that was in the article on the 30th and yesterday it started breaking out of its downtrend that has been in force since July and is racing ahead this morning.
The rate of money creation by the Fed now is simply astounding, even to battle hardened market veterans. Bob Moriarty of 321gold.com in a recent interview said that more money has been created over the past month than was used for fund the entire Vietnam war from the 1950’s, and that’s in real terms, I believe he said. What this means is that we are the final crack up boom of money creation using war as the justification before the whole system blows to smithereens via a either credit lock up or hyperinflation and maybe both.
The US and Israel who seem to be hell bent on imposing their will on the Arab / Muslim world might benefit from reflecting on the fact that the Mid-East still produces 30 – 40% of the world’s oil and so, if they don’t adopt a much more conciliatory stance, they may have to face the consequences of Iran blocking the Straits of Hormuz or a general oil embargo on the West that could cause oil to spike to $300 a barrel or more – and if this happens the now extremely fragile Western banking and financial system will go down faster than an apartment block in Gaza, speaking of which the brutal and appalling treatment of the Palestinians in Gaza by Israel which is completely unjustified has created an unprecedented unity in the Arab world who have already witnessed the destruction caused by the Hegemon in places like Iraq and Syria and may figure that, rather than wait until it’s their turn, it might be best to turn off the oil and collapse the West’s financial system while they are still able to because by doing that it will no longer be able to finance its global war machine, and China and Russia can then step in to restore security. This is a big reason why oil and oil related investments that we have already looked at are thought to be a good place to invest now, along with gold and silver.
End of update.
Posted at 10.20 am EDT on 3rd November 23.