Thread by @kevinmuir

Mini-tweet storm for bond 'tourists

In a previous post I outlined various FALSE bond bear arguments that you should run away from...

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Today, I will try to refute a common narrative that I often hear from bond bulls:

"The government will peg entire yield curve and even if you are right about increased inflation, you won't make any money on your short position because long rates will be 0%."

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Ok, I get it.

The Japanese have pegged their curve.

The ECB is manipulating all portions of its market.

Heck, yield-curve-control has even been done in the United States in prior periods of history.

brookings.edu/blog/up-front/…

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But if you think that it's going to happen again anytime soon, then I will take the other side of that trade.

And let me tell you why...

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Think about how many Wall Street bankers make their living trading bonds. Then think about how many jobs would be lost, and even more importantly, the profit from trading these bonds.

And ask yourself if the Wall Street lobby would ever allow the Fed to peg the curve.

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America is a nation built on freedom. That freedom includes many things, least of all free markets.

Pegging the yield curve will be the last step they take.

I am thinking they are going to do a New Hampshire licence plate motto on this one...

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