“Yield Curve Control”?

“There is nothing wrong with your television set [market signaling]. Do not attempt to adjust the picture [ratios, indicators, free market inputs]. We are controlling transmission [of the signals you receive]. If we wish to make it louder [more bullish], we will bring up the volume [bond market manipulation]. If we wish to make it [the economy] softer, we will tune it to a whisper [back away from bond market manipulation]. We will control the horizontal [short end]. We will control the vertical [long end]. We can roll the image [yield curve], make it flutter. We can change the focus to a soft blur or sharpen it to crystal clarity. For the next hour [Along the Continuum’s decades], sit quietly and we will control all that you see and hear. We repeat: there is nothing wrong with your television set [market signaling]. You are about to participate [have been participating] in a great adventure [since Greenspan took over and first began to defile the Federal Reserve at least, although real conspiracy theorists would say since Jekyll Island]. You are about to experience [have been experiencing] the awe and mystery which reaches from the inner mind to – The Outer Limits [for some time now and don’t expect it to change any time soon.]”

fed meeting

The Continuum, lest we need a reminder… See? No inflation over the decades of inflation. The orange arrow notes last year’s close call when today’s renowned dove, one Jerome Powell, was H2 2018’s inexplicable hawk. People, it’s right here in pictures. He was firm when the Continuum threatened to undo the gambit and he’s a dove now that it’s all been fixed (exactly as we expected, eh Bueller?).


Anyway, this tweet by my favorite ex-Fed malcontent (said with admiration) Daniel DiMartino Booth (@DiMartinoBooth) is what inspires this post. Clicking the image brings you to the article she tweeted about.

A departure from the classic focus by central banks on short-term rates, the Bank of Japan’s “yield curve control” initiative aims to anchor longer-term rates that often more directly influence consumer borrowing costs and spending.

Of course these clowns have been working over the long end for years (cough cough… QEs 1-3 and a massive manip known as Op/Twist… cough cough). Bernanke controlled the yield curve in 2011 by selling short-term bonds and buying long-term bonds. So I don’t know why the media are convoluting the issue by telling us the Fed and other CBs could go full frontal BoJ.

The disgusting thing is not that they are making their usual little plans behind their usual closed doors. It’s not that they will try to bend once again the free market to their will. The disgusting thing is that this stuff is printed in the media as if it is normal. It is not fucking normal people. It is completely abnormal to a free market and the majority of market participants just go along with it, Outer Limits style. That is the disgusting part of it.

But it goes further than simply Fed Funds and long-term yield manipulation. The Fed’s Lael (big brain) Brainard had this to say at a “Fed event” (must be a hell of a time).

The Fed’s Brainard discussed the concept at a Fed event in May.

“Once the short-term interest rates we traditionally target have hit zero,” she said, “we might turn to targeting slightly longer-term interest rates – initially one-year interest rates, for example, and if more stimulus is needed, perhaps moving out the curve to two-year rates.”

I’ll tell you this; we are on the verge of another inflation-effects event because the Fed and its fellows are cooking up inflation. If they manage to sweep it under the rug and control the macro again – with all those conventional sheep well-tended and orderly – then I don’t know what to tell you. We gold/silver bugs will be sent back to the hell we came from and this gold/silver bug would have to go back to the conventional market management I’ve had to employ since 2011. I would rather see the market rebel, resist and reject the manipulation this time. But whatever… they are attempting to control the picture.

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