Loading ...Willem Middelkoop
@wmiddelkoop
ยท
1h
Major North American Bank Comments:
Gold ripping +4% as the classic conspiracy theory of “yield curve control” has now become a reality
The debasement trade is alive and truly kicking. As we have consistently written, Bessen has a decision given the US’ fiscal math: “save the UST or save the USD; you cannot save both.” His hand has been forced by the recent price action of the long-end of the yield curve.
Conventional Wall Streeters will say this is “Not QE” in the same way the RMPs by the Fed was not “QE.” We still don’t know the full details, but the fact is the Treasury is trying to contain the long-end of the yield curve is incredibly bullish gold.
Specifically, it will raise “by at least double, the size of liquidity support buyback operations for longer-dated nominal coupon securities (10-20 and 20-30yr sector). “At least $4bn per month” to keep a bid for the surging long-end of the curve.
Whilst mainstream insists it’s not QE as the stock of debt is not increasing, there is no explanation for where the buying is coming from; certainly no claim the Treasury is going to be dumping bills to fund bond bids.