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Created on: 3/14/2021 8:48:34 PM   Last Update: 3/15/2021 2:01:50 AM Posted by: RTT
WARNING: This entry is 262 days old. It may contain broken links, out-dated or misleading content. Please read on with caution.

1 POST 1940s Yield Curve Control Review
1940s-yield-curve-control-reviewYield curve control was operational during and post World War 2 for a 9 year period.

The US stacked up a huge national war debt. With war comes with higher inflation, this time higher inflation could not be allowed to be followed by higher interest rates as the national income could not pay the interest bill and a sovereign debt default would follow. The response by the Federal reserve was to cap interest rates near 2.5% to contain the interest expense.

The chart below shows this period.

In the chart below while inflation (CPI) is above the 10 year interest rate this is known as 'negative yield' and purchasing power destruction of the currency (USD), hence why funds will flow into anti US dollar trades like gold, silver, bitcoin and oil.

The bond holders become the investors holding the short stick as inflation destroyers their capital, stocks do well, commodities do well. The problem for the FED is the bond holders are massive in number and for the FED to contain their selling they would have to buy all which is sold or convince this class of investor that it is best for national interest that they 'do not sell' and take the loss for the good of the nation. During World War 2 the bond investors made this patriotic choice, today maybe not so much, hence the FED buying could be exponential.   


Currently the FED is jawboning the idea of yield curve control for a period of 2 years. Get the feeling the DEM's are targeting mid term elections with the FED help, hmmmm.


POINT: The FED's choice is to trash the dollar to save the economy, or trash the economy to save the dollar. 


Reminder ..


..."I learned early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that."..

Jesse Livermore



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Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, Cycles, Wyckoff and Ney logic is the best way to ride the change, after all these methods have been used successfully for 70+ years. This post is a delayed and small sample of what is avaliable to members. Sign up to enjoy the full service.


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Investing Quote...

..."I did not know then what I learned later, what made me fifteen years later, wait two long weeks and see a stock on which I was very bullish go up thirty points before I felt that it was safe to buy it. I was broke and was trying to get back, and so I waited. That was in 1915."...

Jesse Livermore


..."If you don't read the newspaper, you're uninformed. If you read the newspaper, you're mis-informed."...


Mark Twain

..The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell"..

John Templeton


.."Money can't buy you happiness but it does bring you a more pleasant form of misery"..

Spike Milligan


My experience has been that in successful businesses and fund management companies, which performed well over the long-term, some courageous decisions were taken. Courageous fund managers reduce their positions when markets become frothy and accumulate equities when economic and social conditions are dire. They avoid the most popular sectors, which are therefore over-valued, and invest in neglected sectors because being neglected by investors they are by definition inexpensive. The point is that it is very hard and that it takes a lot of courage for a fund manager to avoid the most popular sectors and stocks and to invest in unloved assets. Finally, every investor understands the principle ‘buy low and sell high’, but when prices are low nobody wants to buy.

Marc Faber





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