US10YR Yields (Bond/Debt Market 1D)

US10YR Yields (Bond/Debt Market 1D)

Nobody, I repeat nobody is talking about the current bond market situation at hand. I will continue to ram this down your throats, and continue to stress the importance as this needs to be shared. 

Is it because retail do not understand the significance and the repercussions that the bond market has on the global "risk on" markets, OR is it because Smart Money/FED/CB's are trying to control the narrative and hide the clear signs that a global wealth wipeout is now very likely to be upon us? I personally think both but I am genuinely astounded to see what I'm seeing... not one tweet, not one post or article on social media/mainstream media addressing what is going on over the past few days as the situation is escalating, this is crazy! 

I am going to now break down my view: 

Firstly, lets look at the chart... can you honestly sit there and tell me this is not an extremely appetising bullish chart? if not the most healthy bullish chart out there at the moment? if this was a stock, Bitcoin or an altcoin (along with many other examples) this would be plastered everywhere and people would be frothing at the mouth to get in on a long, and rightly so. 

Yields are in a bullish supertrend! They have done nothing but aggressively move up (with correction structures) since January 2022, and what has happened since January 2022? risk on markets such as crypto and stocks have been on a solid bearish downtrend (with correction structures). 

We are literally following a similar expanded fractal from 2022 (as seen on chart) which then broke out, went parabolic and eviscerated the risk on markets. All the confirmations have been met! bullish structure, breakout, multiple days holding above the 50MA before going parabolic, and CPI didn't change things (which was last line of defence). 

Secondly, lets understand the mechanisms in play here and what happens if we see my forecasts come true (achieving 5% yields by Q2 2023):

All of the risk on markets are built on a debt bubble and massive overvaluations/multiples stemming from the Governments/FED/CB's balance sheets. As bond yields rise this means that bonds are being offloaded and typically results in liquidity being withdrawn from correlating risk on markets, such as stocks, crypto etc. 

The magnitude of this is what's important, the US bond market alone is estimated to be in the $125 trillion vicinity, and global bond markets in the $200-300 trillion vicinity. The issue at hand is an astronomical amount of debt was taken on throughout the covid pandemic to prop up the markets and economies, the majority of the first world countries are entrenched in each others bond/debt contracts (which is why it will be a global wipeout). A lot of margin was used which of course incurs premiums and the solvency of balance sheets is dependent on the underlying asset values (similar concept to 2008) but its not overleveraged housing bonds dependent on consumer premiums, its debt contracts/bonds dependent on a combination of government and retail premiums/demand to keep the house of cards from toppling over.

The reason that the house of cards is likely going to to topple over very soon is because the demand can’t be sustained nor the premiums. The bottleneck is getting tighter and tighter due to the economic pressures and inflation, there’s not a lot of liquid cash about for the consumer or the governments.

It’s a real catch 22 situation . As the governments are committed to fighting inflation and not killing the economys, they can’t print more money and have the financial ammunition needed to prop up the beast they have created. They are being forced to reduce balance sheets and de leverage (as part of QT) in addition making lending facilities harder to attain, when they need to be doing the opposite.

At the moment they are robbing Peter to pay Paul per my observations, In the sense they are selling parts of their balance sheets and rotating the cash into other areas that require immediate attention to prevent collapse, whilst absorbing as much retail liquidity as possible for liquid cash. 

The problem is this is incredibly hard to manage and will only get harder, a slight unexpected variable will destroy everything, markets will then capitulate in pretty much a straight line down and everything will be in ruin fast! pensions will be wiped out etc. The end result being a bailout and a repeat of the same vicious cycle we have been in since the inception of the fiat monetary system. 

Finally, I believe they are going to front run the collapse, rather they cause it than it catch them off guard unexpectedly, this is why this whole ridiculous market dynamic we are seeing is in place, overly strong job market numbers coming out, inflation is coming down and the risk on markets are strong… all lies, with the intention to suck all the retail liquidity in and then sweep the rug out from underneath when nobody expects it.