[tom]

wulfgar, on 01 April 2010 - 03:23 AM, said:

Yes, I'm not in favor of the modern views of "growth" in relation to money supply. The argument is that inflation does not could occur if the money supply rises in concert in with the production of goods and services.

To me this is nonsense. For me gold is a key guide in what real production means. Historically the supply of gold per capita has risen slowly.

It is better though for governments to direct spending toward the productive parts of your economy at least aiming to spend to increase production. In theory at least it is supposed to be neutral on inflation.

You are probably right that it still has some inflationary pressures due to wage rises and less caapcity in the short term during construction but I suspect it is far less inflationary then just handing out cash with no increase in productivity whatsoever like our cash handouts and school building projects.

[cobran20]

Click on th link below to view the charts:

US - Long-Term Rates Finally on Verge of Breaking Out

[boz]

overnight in US bond yield shot up to a 10 month high of 4.95% (for the 10 year term)
My link

Quote

April 2 (Bloomberg) -- U.S. stock-index futures, yields on 10-year Treasuries and the dollar advanced after employers added the most jobs in three years, boosting optimism that the economic recovery is accelerating. Standard & Poor’s 500 Index futures expiring in June rose 0.3 percent to 1,177.30. U.S. stock exchanges were closed today for Good Friday. Treasuries fell, driving the yield on 10-year notes up 0.08 percentage point to an almost 10-month high of 3.95 percent. The U.S. dollar reached 94.70 yen, the strongest since August, at 9:45 a.m. in New York.

Payrolls rose by 162,000 last month, less than anticipated, after a revised 14,000 decrease in February that was smaller than initially estimated, figures from the U.S. Labor Department in Washington showed today. The March increase included 48,000 temporary workers hired by the government to help conduct the 2010 census. The unemployment rate held at 9.7 percent.

“It’s a good, solid report,” Treasury Secretary Timothy F. Geithner said in a Bloomberg Television interview in New York. “It shows we’re getting stronger, and the economy is now creating jobs.”

....

So:
we have oil braking up above 83$, stock market braking upwars as well, a relatively strong US$ and then a rising long term bond yield.
These things are incompatible and I think will be short term. I think the one that will give up soon is a strong US$ (that is also the price of gold)

This post has been edited by boz: 03 April 2010 - 04:11 AM

[cobran20]

boz, on 03 April 2010 - 04:09 AM, said:

overnight in US bond yield shot up to a 10 month high of 4.95% (for the 10 year term)
My link



So:
we have oil braking up above 83$, stock market braking upwars as well, a relatively strong US$ and then a rising long term bond yield.
These things are incompatible and I think will be short term. I think the one that will give up soon is a strong US$ (that is also the price of gold)

I think the $US index still has more in it and being helped by rising yields. OTH, the US market is overbought and as I said in the 'Got Shares' thread, the rising oil price will change the 'V' recovery into some kind of 'W'. In a month's time will know if it is 'Sell in May and go away' time again.

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[wulfgar]

boz, on 03 April 2010 - 04:09 AM, said:

overnight in US bond yield shot up to a 10 month high of 4.95% (for the 10 year term)
My link



So:we have oil braking up above 83$
, stock market braking upwars as well, a relatively strong US$ and then a rising long term bond yield.
These things are incompatible and I think will be short term. I think the one that will give up soon is a strong US$ (that is also the price of gold)

Well I do tell you guys.

wulfgar, on 12 February 2010 - 09:06 AM, said:

How's the portents looking for OIL, oh ancient and wise one?

How about 120 USD by June?

[Bernard L. Madoff]

You want to see Australian inflation? Oil at $120bbl should be peachy.

[boz]

Ok, I make a forecast for oil as well:
how about at 20 times with gold and in the range of 45 to 65 with the euro by june?

[wulfgar]

Tinpusher, on 03 April 2010 - 07:43 AM, said:

You want to see Australian inflation? Oil at $120bbl should be peachy.

This is where it gets tricky. The massive risk is debt deflation.

Our model of inflation/deflation is based the simple one, on what happened to the prices everytime Caesar made it back to Rome with another looted treasury.

Rising oil prices trigger massive debt deflation that can over ride ordinary inflation that arises from printing simple currency.

Oil is such an important input. Oil goes higher and the worlds business activity begins to close because it over rides profit.

Business cannot put their prices when nobody can afford the goods anymore. People don't pay higher prices......instead trade creases.

Enough of it and the next stop is the stone age.

Oil is a cash crop!

[boz]

wulfgar, on 05 April 2010 - 11:46 PM, said:

This is where it gets tricky. The massive risk is debt deflation.

Our model of inflation/deflation is based the simple one, on what happened to the prices everytime Caesar made it back to Rome with another looted treasury.

Rising oil prices trigger massive debt deflation that can over ride ordinary inflation that arises from printing simple currency.

Oil is such an important input. Oil goes higher and the worlds business activity begins to close because it over rides profit.

Business cannot put their prices when nobody can afford the goods anymore. People don't pay higher prices......instead trade creases.

Enough of it and the next stop is the stone age.

Oil is a cash crop!

It is tricky stuff, for sure you can't have gold going up and oil not. Actually at 13 times with gold ail is not that expensive. The key of inflation is that oil has to move up in line with assets revaluation (sharemarket and homes) and with cpi and wages, probably a 10% rise in oil will bring only a 1% rise in cpi and wages and on businesses/family costs.
Anyhow, bond yield is also a cash crop and today is another bond yield rising day with Japan 10 year term over 1.4% and australia over 5.8% with USA at 4.
I think after commodity, sharemarket and bond yield rises the ball will swing back to the 2008 scenario with commodity, sharemarket and bond in deflation mode again.

[wulfgar]

OK Cobran, oil has cracked 85.........what do the charts say?

[cobran20]

wulfgar, on 06 April 2010 - 07:06 AM, said:

OK Cobran, oil has cracked 85.........what do the charts say?

It's rising!

After $87, the next target is around $100.

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[wulfgar]

cobran20, on 06 April 2010 - 08:46 AM, said:

It's rising!

After $87, the next target is around $100.

And oil moving up from $90 to $145 in the first part of 2008 tipped world finance out the apple cart.

The last time oil was at its long term cheap price of $20 was in 2003. In todays money that is about $27. The "economic growth" of the late 80's and 90's was built on very cheap oil. Todays price is 3x that in real terms. Cheap oil is finished. The market will simply adapt itself to more expensive or less per capita energy and mass production.

[boz]

The aUS 10 year bond is testing last week support (yield around 5.9%)...
 au10 year bond 1 hour chart.png (15.98K)
Number of downloads: 4
about to brake through to jump over 6%?
the 3 year bond is also at last week suppport around 94.5
Us 10 year bond is closing to 4% again and Japan is steady at around 1.4%

[boz]

Quote

Greece sells 1.2 bln eur of T-bills, 52-week yield 4.85%
Tue Apr 13, 2010 5:19am EDT ATHENS, April 13 (Reuters) - Greece's Public Debt Management Agency (PDMA) sold 1.2 billion euros ($1.63 billion) of 52- and 26-week T-bills on Tuesday, in its first debt sale since details of the European/IMF safety net were announced at the weekend.

Stocks | Currencies | Bonds | Global Markets

The auction was covered but Greece had to pay a high yield.

PDMA said the auction produced a yield of 4.85 percent for 52-week T-bills, up from 2.20 percent in a previous Jan 12 auction. The bid-cover ratio was 6.5 versus 3.05 in the previous auction.

The yield for 26-week paper came to 4.55 percent, up from 1.38 percent in the Jan auction. (Reporting by George Georgiopoulos)

My link
well, while things are not getting much better for greece bonds in other country bond is bouncing back from resistance and yield on 10 year term is down to below 5.8% for australia, at 1.38% for Japan.
This is when the oils is back below 84$
was last week a false breakout for oil? i thought the US$ was the one to give up but may be is commodity the one coming down first?

[boz]

with the drop in commodity and share market investor bought long term bond again driving down the yield significantly, specially for japan and Germany. Australia 10 year gov bond is back below 5.8%

[boz]

Interesting correlation between banks share prices and bond yield link
click on the link for the chart

Quote

Corporate Bonds Foreshadow U.S. Bank-Stock Gains: Chart of Day
Share Business ExchangeTwitterFacebook| Email | Print | A A A By David Wilson

April 19 (Bloomberg) -- U.S. bank stocks are poised for gains because they have only begun to catch up with a surge in corporate bonds, according to Ian Scott, a global strategist at Nomura International Plc.

The CHART OF THE DAY compares the industry’s stock performance relative to the Standard & Poor’s 500 Index with a Moody’s Investors Service index of yields on Baa-rated corporate debt, the lowest investment-grade category. The latter is shown in reverse because falling yields translate into rising prices.

“Bank stocks have hardly responded” to the rally in bonds, Scott wrote in an April 16 report, even though the S&P 500 Banks Index has more than tripled since March 2009. This is the industry gauge used in the chart, which is similar to one published in his report.

The group fared much better in the early 1990s, when the stocks kept pace with corporate bonds as banks rebounded from real-estate losses, in his view.

Rebounds in mortgage-backed securities and leveraged loans, made to debt-laden companies, also signal that the rally in U.S. banks’ share prices “has further to run,” the report said.

“U.S. credit measures have improved across the board,” Scott wrote. “None of these improvements has yet to be reflected in either the absolute or relative performance of bank stocks.” He recommends that investors have more money in global banks than their weighting in benchmark indexes would suggest.

(To save a copy of the chart, click here.)

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

Last Updated: April 19, 2010 11:37 EDT

While to me seems banks and bonds are out of whack it could return to the mean by a rising in bond yield.

[cobran20]

Would you invest in a country that could easily default?

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[boz]

Strange day for bonds where stock market is up to the moon bond is up too! (yield down), even gold is down (while oil and other commodity up).
This resiliance of bond yield from braking on the upside is remarkable.
Got to go and find some reason for it...

[boz]

here is some data:
 bonds prices.gif (76.11K)
Number of downloads: 1
In europe Pigs yield down and other better rated countries up. but as i said worldwide yield is down to a quite a low point for the last few months (for example japan at 1.29% and US at 3.7%)

[cobran20]

The best interest rate chart in the world