This post serves as a public version (i.e. more wordiness than is usual in an NFTRH report) of NFTRH 472’s Bonds & Related Indicators segment. If you’re not following bonds closely, you’re not really following stock and asset markets. You’re throwing darts.

At the junction of the inflated risk ‘on’ trade (stocks, global growth assets, etc.) and risk ‘off’ (gold, Treasury bonds, cash & equivalents, etc.) are the pivotal indicators to these conditions, Treasury bond yields, yield dynamics and bond market signals.

My assumptions are that inflation instigated speculation is in play, but it has been seen as ‘good’ inflation or not inflation at all because it’s been rooted in stocks on this cycle… and how can that be bad? That is sarcasm.

The other assumption is that the bond market, routinely manipulated at will by powerful policy makers over the last 9 years has served two purposes; to mask the inflation (the Fed’s Operation Twist literally had that as its primary goal and function) and to help fund asset speculation. I just shake my head when I hear economists talking about ‘GDP this, full capacity that and recession the other thing’ in conventional, buttoned-down terms because the economic recovery is the asset bubble and after this one is resolved they’ll be doing what they always do, which is feed us all the reasons why it went down an unexpected path well after the fact. That is because it is not a conventional economist’s job to question why, only to extrapolate conventional Economics 101 through Masters degree level economic theory… until something breaks.

Look no further than economic guru Abby Joseph Cohen, she of 2000 bubble era fame. Apparently she’s still taken seriously as there she was being interviewed on NPR this week. In a discussion about new Fed chairman Jay Powell (a non-economist she made sure to point out and fret about) Abby talked about how Masters level economist Ben Bernanke was masterful in his deft handling of the 2008 “financial crisis”. People with vested interests in keeping you in conventional thinking mode never seem to mention that it was Federal Reserve policy excess that instigated the “financial crisis” in the first place. Take a view from NFTRH and you may see the folly of it all.

Back on message, the assumptions are that money printing in its various forms was used to promote asset speculation as an economic remedy and that bonds have been manipulated in order not to show true inflationary signals. If you ask me, these assumptions are self-evident, but for the sake of balance we’ll play it straight. We’ll also note again that stock market trends are bullish (Captain Obvious). That is what most people actually care about, I grant you. But I have a need to always be trying to flesh out the why along with the what. The why is the result of massive monetary stimulation and the what is bullish. Period.