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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 428 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...

..."They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market."..

Jesse Livermore


...“People somehow think you must buy at the bottom and sell at the top to be successful in the market. That’s nonsense! The idea is to buy when the probability is greatest that the market is going to advance”...

Martin Zweig (The inspiration behind a number of Martin Zweig’s methods came, from Jesse Livermore).


.."Wait for that wisest of all counselors, Time"..


Pericles

.."A businessman cannot force you to buy his product; if he makes a mistake, he suffers the consequences; if he fails, he takes the loss. If bureaucrat makes a mistake, you suffer the consequences; if he fails, he passes the loss on to you"..


Ayn Rand

.."Until an hour before the Devil fell, God thought him beautiful in Heaven"..

Arthur Miller, “The Crucible”
 [Contrarian Investing]






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