Thread by @DesoGames

I'll do you one better. There WAS a catalyst. It's just already passed:

https://twitter.com/DesoGames/status/1364632323044626437

"When real yields go positive, the correlation between negative yields and gold will break."

Lo and behold. Since the 8th, the 10 year has gone more negative.

And #gold is up...

https://twitter.com/GlobalProTrader/status/1370399688063643650

And just to put in in simple terms this time, cause people have been asking for clarification:

Bond yields aren't going up for technical reasons anymore.

They're going up cause of the solvency crisis having morphed into a crisis of faith.

No one WANTS bonds anymore!

So why hasn't the market crashed *today*?

Well, conversion rates and legacy rules. Pension funds can't just start selling their treasuries en-masse.

The Fed is still buying $90B a month, which isn't enough, but it's something which still affects the markets.

Foreign governments can't just dump their treasuries wholesale as it kills the dollar, which they all have on the balance sheet to facilitate international trade, as it's the reserve currency.

Even the bots are programmed to rush into the DXY when the TREASURY market breaks ffs.

But.... That doesn't mean that, every single day, one more bond trader gets *too* scared, sells his holdings, and looks for safety elsewhere.

That process is a crisis of faith and it can only be stopped when governments change the PROJECTIONS of what's gonna happen.

WHY would you buy US bonds now, when you KNOW they're printing ungodly amounts of money and there WILL BE VASTLY MORE SUPPLY in the future?

2011 was different. *QE was NEW*.

2021 is different because QE has been used now *for more then a decade WITHOUT results!*

Oh it has done something. But not what the Central Banks wanted it to. They admit as much themselves.

So what's more of nothing gonna do? Nothing.

The more QE is used now, the less anybody else is gonna wanna hold those bonds, because it just makes the above more obvious.

This clearly can be seen by the DXY spikes recently and how the dollar has changed in value against other currencies.

Presenting this picture again; The USD, Yen and CHF *all* perform the same role of Safety. If there's a liquidity panic, those are the buy targets.

So why in the hell are the Swiss Franc and Japanese Yen sliding *the most* against the dollar, while the CAD and AUD are barely affected? Those are riskier currencies, with housing bubbles of epic proportions in both countries.

Likely because they're commodity currencies.

The catalyst you're looking for @GlobalProTrader is the Sea Change of the definition of "Safety".

The Yen and Franc were always safest for fiscal reasons. Switzerland's not gonna go bankrupt (since they have everyones gold lol) and the BoJ wasn't gonna let Japan go.

But those are again, Fiscal reasons.

The same reason why the US couldn't go bankrupt any time before 2019; Demand for dollars was too big - but only because it's used in international trade as per the petrodollar system.

Which is now also dead and buried btw.

That ended when the US became energy independent with Shale oil. That stopped the recycling of petrodollars into Saudi Arabia which caused them to start the oil price wars.

The Sea change is the one we've all been waiting for for DECADES now:

A Return To Fundamentals.

And Stimulus was passed yesterday.

Fundamentally, that means alot more bonds WILL be printed now (and the markets are about as forward looking as a goldfish these days with the fucking algos running the show).

That's certainty.

Fundamentally, there WILL BE more bonds.

More bonds means a lower price per bond, fundamentally.

And this is happening *at the top of a 40 year bull run in bonds*

Which happened ontop of a *multi-century bull run in bonds*.

And rates hit 0%, implying there is 0% risk of default.

Thats *fundamentally impossible*.

In other words;

Rates were kept *artificially* negative. Any economist worth their salt will confirm rates can't naturally go negative, they have to be forced down.

When rates popped positive *regardless* (and the 30y was enough), that sent a real clear message:

"The artificial peg is failing."

"Central banks are out of ammo."

"They cannot print more debt to depress rates."

This is why i believe YCC won't do jack shit at this point, which is why they haven't used it yet.

They've been treating a solvency crisis as a liquidity crisis.

They've added more and more debt to the system, exacerbating the solvency crisis.

When a solvency crisis gets out of hand, it transforms into a crisis of faith. "The money will come back" > "The money might come back" > "The money might not come back".

That's all that's needed.

We're in the 2nd phase of hyperinflation now.

Alot of things are going to shift from fundamentals to psychology - and some things shift back.

What used to be important is important again. What is important now, ends up being not that important at all. (*cough*$TLSA*cough*)

For example; Prices are not gonna make any sense because people will want to get rid of the dollar, MORE then they want to buy the stuff.

Stuff will get more expensive while losing value. Because it's a reverse mania; Everybody desperately not-wants the currency.

At the same time, we all continually live in reality. There's no way around it.

We have to use SOMETHING for trade. But since debt and money is worthless, then what?

Well, stuff that has fundamental value.

Gold. Silver. Physical things; not-infinitely reproducible.

Stuff that's ALWAYS worked according to fundamentals.

It's not like the markets want this to happen. The crash will be legendary.

But when EVERY SINGLE INDIVIDUAL's costs are going up, and then the Fed Chair says "There is no inflation",

Every individual knows he's lying.

I've been saying to my followers; There's no telling what truly activates hyperinflation. But usually it's an event that spreads inevitability to a large mass of people all at once.

Credibility is easily lost, and not easily regained.

And that's where we are at.

Bonds aren't sliding anymore because they are or aren't a good technical buy.

They're sliding because they're worthless garbage that's now going to zero inevitably - it's just a question of how fast everyone catches on.

Conversion/exit rates will determine prices now.

As for gold and silver; There will be days where they do correlate, and days where they don't.

The Gold/negative yield correlation was *never* causation. Merely a symptom of QE going into synthetic assets (stocks/bonds) and not into real assets (commodities). That's ended now.

I've been warning my followers for months, and my timing was a bit off, but it seems we are finally here.

#SilverStimulus has passed. Doomsday demand, is at hand.

#wallstreetsilver #silver #silversqueeze #Silverbacks #PSLV $PSLV #PSLVChallenge @WallStreetSilv @Galactic_Trader