2 years later inflation drives the Continuum to target

30yr Treasury yield finally hits target

Ah, but it’s not that simple. Targets are not necessarily stop signs. It’s at the decision point.

Will the yield do what it has not done in decades and break the limiters for real (instead of just poking them as before) or will it do what it has done for decades, which is to fail here?

People mocking the Fed have no idea who desperately those eggheads do not want to see the Continuum break out into a full frontal von Mises style crack-up-boom. IMO the Fed is cynical about the inflation it routinely creates as a way of remote economic control. Jay is out talking tough and he’s not pretending because runaway inflation and runaway inflation indicators blow the Fed’s racket.

30yr treasury yield

On the other side of the Treasury curve there is this little pressure valve about to blow as well.

I am not saying that the Fed can gently put the inflation back in the bottle. In fact, I am saying that if they do get it crammed back in there it will likely result in a significant deflationary episode. But if they can’t shove it back in you’d want to get prepared for some uncharted territory where inflation pressure upon a debt leveraged system is concerned.

Interesting. Times. And scary words above or not, if we crack-up don’t be surprised if some of it takes the form of asset bubble making before the whole thing self-immolates, taking the Fed with it.

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