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Does anyone know if funding US debt from the short end preceded previous
rate inversions and subsequent recessions?
Michael
"Those who would trade opportunity for security will soon have neither."
------- Ben Franklin
----- Original Message -----
From: "JW" <JW@xxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Wednesday, February 02, 2000 02:56
Subject: [RT] MKT: FYI - James Smith/Martin Armstrong (the accused thief)
| Over 4 yrs ago Martin Armstrong warned that the Clinton Administration was
| making a huge mistake in funding the debt mostly on the short-end.
| Armstrong warned that doing so would cause the yield curve to invert and
| that the end result would be greater volatility in the financial markets
and
| a huge vulnerability to the next surge in inflation. Guess what?...
| Armstrong was right! As we start a new commodity bull market we are
about
| to learn why most people don't finance their house on a credit card.
| Effectively the govt is doing just that. Over 30% of our debt is funded 1
| yr or less; and over 60-70% of our debt is funded 5yrs or less. A more
| prudent administration would have taken advantage of lower longterm rates
to
| lock in most of its financing in 10s & 30s. But not Slick Willy! He
knows
| he won't be President when the proverbial fit hits the shan! So who
cares!
| If the Clinton Administration have decided to issue fewer bonds and buy
back
| off-the-run old bonds, they do so for a reason.
|
| They are trying to negate the effects of a FED rate hike, but they won't
| succeed. They will only force Greenspan to raise rates more aggressively
| than he otherwise would, to have requisite slowing effect on the economy.
| You can forget about the Surplus!!!
|
| The Clinton administration just wasted it!!!
|
| A steeply inverted yield curve means that the surplus will disappear
faster
| than most economists are willing to admit. By the time the Administration
| realizes their mistake, its too late. It will be difficult to slow down
the
| economy without taking drastic action. In the meantime, commodities will
go
| on a tear, bring inflation that this administration would like to deny or
| ignore.
|
| The CRB just closed the month of January above 206.73, electing a key
| monthly bullish reversal. The next higher monthly bullish reversals are
now
| at 231.74, 235.36, and 246.85. The gap between 206.73 and 231.74 is huge
| and may suggest a fast move to fill the gap.
|
| Granted a monthly signal on the Reversal System does not imply much about
| the short-term. It could take a few months or more for the CRB to reach
| 231.74. In fact, we cannot rule out some limited weakness in the CRB over
| the short-term. Just look at Gold.
|
| GOLD is showing absolutely no strength even though OIL and many other
| commodites have started a secular bull market. In fact the best thing
that
| could happen would be for GOLD to sell off into its 8 year cycle this
| March. New Lows below 252 NY Spot into March or as far out as
| May, would strongly suggest that a secular low is in place. A rally into
| March--May timeframe would suggest a further decline for gold going
forward.
| A weekly close below 277.1 Gold NY Spot will accelerate the current
selloff
| in gold.
|
| Not all commodities have started a new bull market, and gold is a good
| example. But take a look at a range of commodity charts and you will see
| the future a whole lot more clearly than politicians in Washington DC.
|
| ------
| JW
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