WATCH YIELDS

As we pen this, the 30 year yield is at 5.318%, the highest level since 2007. The 10 year yield is at 4.736% in a definable uptrend and nearing last month’s high as well as multi-year highs. A close look at the longer term chart of the 10 year yield has us stating it better not move up much from here and especially above the psychological 5%.

These are just facts. Another fact is many global bond markets are acting the same. The cost of money/the cost of capital is going up…simple as that. Of course, this is a moving target and the hope is that yields hit a wall on the upside.

But…some other facts. Estimates but close. We are nearing $40 trillion of debt. Wait to you see how quickly we get to $50 trillion. We will run a $2.2 trillion deficit this year while paying about $1.4 trillion in interest. (Our total federal spending in the year 2000 was $1.8 trillion. Chew on that!) The blame is on all. The party in power is not 100% to blame but numbers are numbers. We throw big blame going back to the year 2000 and we throw huge blame on the last guy and his fake Inflation Reduction Act that they even stated does nothing to reduce inflation but it sure raised spending. But to be fair, after coming in talking Doge where we had some hope…never mind!

Global government debt is estimated to be $110 trillion with total overall debt of everything a measly $350 trillion. Yup! But who’s counting?

For the hundredth time, watch yields. Our comment is not even on the stock market but the real world of mortgages, loans of all stripes, the cost of capital, the cost of money and all that crap. Must also add a further move upward could force the hand of the new guy at the Fed. He had better not pull a Powell and start printing to get rates down again. Do you remember that 9% inflation?

We do not believe this is being covered enough. Again, keeping fingers crossed that yields hit a wall.

For the hundredth time, WATCH YIELDS!