Don't Buy The "Yield Curve" Baloney

Comments · 606 Views

LIBs and dishonest media hoping to spur a recession.

This article is from August 2019. It was posted on another platform where I tried to communicate with fellow Patriots, but that platform repeatedly censored me -- without telling me why.  I will be moving all of my Notes from there to here in the coming weeks.

As a preface to all that follows, the "negative yield curve" is not an indicator or a cause of recession. Not even close. It is a coincidental occurrence that has preceded some recessions.

Are there more and more indicators of recession? No. Actually, there are NO indicators, but there is more and more gaslighting by the media.

First, let's look at what has to occur in a recession. The dominant defining occurrence is two straight months of negative GDP. There are a huge number of variables that must occur for there to be negative GDP. The US hasn't had one of those variables kick in and isn't even close. Is anyone of the experts predicting a recession also predicting even one negative quarter? Nope.

What else has to happen?

Second, unemployment rises and business stops expanding and stops hiring. They even start laying off workers. Not one or two businesses do this. Almost all stop expanding and stop hiring and start laying off.

What else has to happen?

Third, wages would be falling and companies would be selling off assets. Not one or two companies and not wages in one sector. Almost all wages and almost all companies.

What else has to happen?

Fourth, overall, the economy would be shrinking -- contracting. It ain't.

And all this bullshit about fewer new cars and fewer new tractors being sold is a big, huge warning sign is exactly that -- bullshit. Do you buy a new car every damn year? How many people do? If you worked on a farm, did you buy a new tractor every year or even every 5 years? Hell no.

People in the US economy have higher wages and more disposable income right now than they've had in a decade. That's a fact. The other fact is that consumer spending is high and consumer sentiment and confidence has been high. Consumers are buying -- it's just not new cars and damn tractors. Those two slight downturns in sales -- alone -- are not a recession warning.

Now, let's look at this negative yield curve and why it's happening now. First, what is it?

It happens when long-term US Treasury yields are lower than short-term US Treasury yields. It's usually the opposite. Long term rates are usually higher because there has to be an incentive for investors to tie up their money for longer terms. Just like with long-term CDs at banks paying a higher interest rate.

Normally, this negative yield curve happens when investors want to invest in a country's long-term economy. Ask yourself this question: why buy ANY Treasuries -- long or short -- in an economy on the brink of recession?

When investors flooded into the long-term US Treasuries to invest in the US economy, the high demand caused there to be no increased adjustment in the yields. Why pay investors more if they're buying them all up anyway? It's like a company offering a sale on an item that is flying off the shelves at the current price. The return rate of interest is less because there is no reason to increase it. Damn, so many investors want those long-term US Treasuries that the government didn't have to offer an incentive. That damn, failing US economy, the one on the brink of recession is selling long-term US Treasuries at less yield than short-term US Treasuries, and people are still buying them.

There is no denying that the US economy is the strongest in the world right now. Where else would investors be willing to park bond investments over a long term? Any idea? So it's not outlandish to imagine lines of investors buying US Treasuries. If the US economy was on the brink of failure, there's an awful lot of stupid investors out there.

Let's say we were talking about a company selling a product instead of a country selling Treasuries. If that company was selling products hand over fist at a greater profit, would that mean the business is failing and about to shut down?

Everyone is buying dollars right now. Everyone is buying US Treasuries right now.

The negative yield curve has happened because the US Treasury doesn’t need to provide an incentive for investors to buy long-term at a higher yield. Why offer a higher rate when everyone is buying anyway?

The media has taken one small coincidental indicator from past recessions (that has happened almost 2 years before recessions, but not always) without considering everything else involved -- to flood the airwaves and cyberspace with their recession narrative.

I have always posted about market drivers and Main Street vs Wall Street. It all comes into play with this media-driven recession talk. Consumer confidence and consumer purchasing are two of the main market drivers.

Wall Street (Goldman Sachs, et al) has a globalist mindset. Main Street has Trump's 'America First' mindset. The two streets have different goals and objectives when it comes to interest rates, the Fed, trade and specifically to China. Wall Street doesn't want companies leaving China, creating new supply chains, and the US making preparations to abandon trade with China if it becomes necessary. Wall Street wants globalist status quo.

There is nothing more sinister than globalists attempting to erode US consumer confidence, strike fear in their wallets, get them to sit on their increased wages and stop purchasing. When consumers stop purchasing, one of the biggest market drivers is gone. The domino effects start happening -- sales go down, profits go down, stock market reacts negatively to lower profits, worker layoffs, higher unemployment, hiring stops, wages drop, companies begin to sell off assets and stop expanding, negative GDP starts occurring, and here comes the media's predicted recession -- that they stoked.

Don't say it's crazy to think any of this. Look at all of your own theories in this forum with 9-11, Trump, Iran, Trump, the military industrial complex, Trump, Epstein, Trump, the Illuminati, Trump, the Bilderbergs, Trump, Russia, the Fed, blah blah blah.

Having a globalist media feeding economic propaganda to consumers is an easy thing to do. Look how they've manipulated political polls, given one party a pass over the other and been selective in their reporting -- and even lying and perpetuating lies.

My advice is to watch ALL indicators -- ALL -- and not put all of your doom gloom eggs in the negative yield curve basket. By itself, the current negative yield curve phenomenon is just supply demand economics.

Comments