Come stare at a chart with me

The yield curve is poised as it was in 2008

I am a man who stares at charts (MWSAC). You know this. I am a man who stares at stock charts, market charts and anything else that can produce gains in my accounts. Hence, I am a casino patron just like most of you, here to profit on whatever this thing is we call a market.

But I do the most transfixed staring at macro charts, especially long-term macro charts with stories to tell. That is because I want to have an idea of the story before it is told. Therefore, it makes sense to ‘quant’ history and apply it to any given current situation, at least in theory.

To a MWSAC like me the chart below is elegant, even beautiful. It is history and therefore reality.

My main question here is regarding the two red ovals. I expect the curve to eventually steepen again but have a major question as to a new steepener’s nature, with two choices that could not be more opposite each other. About 99.9% of the public thinks “it’s inflation all the way, baby” as my late friend Jonathan famously (to me and NFTRH readers) and rightly said in late 2008, importantly in the midst of deflationary Armageddon against which the Fed was taking steroidal action but oh… 99.9% of the public thought was going to persist.

Stare at the chart. Think about these things. If nothing else, it’ll make you a stronger inflationist for having considered them. But it could also serve to make you better prepared in the event that what 99.9% of people are thinking right now does not persist.

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