Today's BONDS!
- Thread starter waggie945
- Start date
Everyone has been selling the market, and talking about how rates will ONLY go higher over the course of this year, and how the FED will have to raise rates in order to cap the inflationary fears that we are starting to see from 8% GDP growth and gold, silver, beans, and crude oil going thru the roof.
Yet, I still feel that DEFLATION is looming large out there.
Just take a look at the collapse in M3 since mid-August!
Another point higher ( 112.16 ) and you get a break-out on the chart and a chance for a much bigger push higher in prices.
Yet, I still feel that DEFLATION is looming large out there.
Just take a look at the collapse in M3 since mid-August!
Another point higher ( 112.16 ) and you get a break-out on the chart and a chance for a much bigger push higher in prices.
Waggie, I haven't been tracking money supply so I'm interested in hearing your thoughts. From what I understand:
M3 = M2 + CD's (or other large time deposits) + Money Market + Term Repos + Eurodollars.
So, just out of curiosity, couldn't a shrinking M3 just reflect a shift from the sidelines into the equity market melt-up as people liquidate money market and CD positions?
Off hand, do you know how the size of tradeable debt is growing (aggregate of treasuries)? Another thing that would factor into this is the level of US treasuries being held as reserves by foreign central banks -- do you know if they are net buyers or sellers of US debt at the moment?
Thanks.....
M3 = M2 + CD's (or other large time deposits) + Money Market + Term Repos + Eurodollars.
So, just out of curiosity, couldn't a shrinking M3 just reflect a shift from the sidelines into the equity market melt-up as people liquidate money market and CD positions?
Off hand, do you know how the size of tradeable debt is growing (aggregate of treasuries)? Another thing that would factor into this is the level of US treasuries being held as reserves by foreign central banks -- do you know if they are net buyers or sellers of US debt at the moment?
Thanks.....
Yeah, my guess is that we're in the early stages of reflation...although I am interested to hear waggie's perspective on the money supply though. However, I am also curious whether M3 declined b/c people were coming off the sidelines and finally putting their capital to work in assets that aren't measured by the money supply (equities, capital spending, etc.). That would seem to make sense to me....
Quote from waggie945:
Everyone has been selling the market, and talking about how rates will ONLY go higher over the course of this year, and how the FED will have to raise rates in order to cap the inflationary fears that we are starting to see from 8% GDP growth and gold, silver, beans, and crude oil going thru the roof.
Yet, I still feel that DEFLATION is looming large out there.
Just take a look at the collapse in M3 since mid-August!
Another point higher ( 112.16 ) and you get a break-out on the chart and a chance for a much bigger push higher in prices.
http://www.elitetrader.com/vb/showthread.php?s=&postid=404283#post404283
Quote from waggie945:
Everyone has been selling the market, and talking about how rates will ONLY go higher over the course of this year, and how the FED will have to raise rates in order to cap the inflationary fears that we are starting to see from 8% GDP growth and gold, silver, beans, and crude oil going thru the roof.
Yet, I still feel that DEFLATION is looming large out there.
Just take a look at the collapse in M3 since mid-August!
Another point higher ( 112.16 ) and you get a break-out on the chart and a chance for a much bigger push higher in prices.
That's the amazing thing. With a backdrop of soaring commodity prices and supposed prospects for economic "growth", bonds should be plummeting instead of breaking out. And yet here we are near a multi-month low on 10-yr yields, with the majority of market players leaning the wrong way (read: much more room to go). If it's a call between equities and bonds, I'd trust the latter much more than the former.