Ive done ya'll a horribe disservice - ima gun try to fix that.

#BONDS and #CURRENCIES thread.

I hope this helps.

πŸ§΅πŸ‘‡ Image
jPan by far is the biggest holder of USA debt.
ticdata.treasury.gov/Publish/mfh.txt

yes other central banks can buy each others dog doo. Image
But central banks can also buy their OWN dog doo

When a CB buys its own dog doo its called "quantative easing" or QE
federalreserve.gov/releases/h41/2… Image
But what happens with another central bank sells another central banks currency...by a lot?

Here is jPan since Jan1 in 2022 selling US treasuries.
UUP is like the DXY, but single state (i will talk about this in a minute)

Notice the correlations ... Image
As jPan sold treasuries, bond yields went up, japanesa currency got weaker, USD got stronger.

By design.
So now you understand how bonds impact currencies

And notice on the tail how jPan started BUYING us Bonds. Yields went down, USD got weaker, and japanesa yen got stronger.

This is the basic mechanics of bonds across countries.

And it matters.... Image
DXY.

I dont use DXY in charts because its flucky. DXY is a "trade weighted basket" of currencies.
Ya - heres the wikipedia article
en.wikipedia.org/wiki/U.S._Doll… Image
so now think about it - if Swiss (CHF) suddenly buy a ton of US treasuries, suddenly it will impact their currency - what do you think happens if they buy a lot of US 30y bonds?
Well, lets take a look...
Over the last week of december, it appears Swiss were selling US treasuries.

Then all of a sudden yesterday they decided (with other CB's) to BUY them back. Image
Every currency is a pair - USDJPY, CADEUR, etc.
DXY is different - its a kludgey ratio tht can be gamed.

Look what happened to DXY when swiss bought a ton of treasuries... (in purple)

CURRENCIES MATTER. Image
Now lets throw a stonk index on here - QQQ is one of the most sensitive to currencies and bond yields.

Look at that fkr jump around (orange)

Sometimes when i saw "swap" its also CB's dumping or buying bonds, just like this. Image
The baseball anology - from slide one.

Consider each ball a few BILLION in US treasuries.

If they sell to another CB, It skewes the DXY formula (the ratio is not even between member states).

SOME - like EU- have a MUCH bigger impact to DXY when they buy or sell treasuries. Image
If the SWISS were to buy treasuries from everyone, the swiss currency would get SUPER strong relative to every other member state - this would be TERRIBLE for swiss economy as a strong currncy kills your exports.
npr.org/2011/08/11/139…
So what these CB's are doing is COORDINATING;so no 1 member state has a currency that is too strong or too weak - a weak currency creates an unfair advantage

When you go shopping/vacation, you go where the opposing currency is CHEAP relative to your own.

expatica.com/ch/general/sw-…
Great example this morning

Anyone wanna try to explain this?
Use everything presented above.

Perfect example of how CB's are fighting oil (i mean "inflation") Image
And its effective - look at how oil moved relative to what just happened to global bonds. Image
Another perspective:

If you hold USD rn you want to go to any of the boxes in red for vacation.

Your vacation, and stuff to buy while you there just got a little cheaper.

Thats what this currency manipulation thru bonds does. Image
u now know what i know - currencies matter a lot.

DXY has been nuts lately....

lets peel back the onion and see why....
#DESPERATION Image
Tighter grain...so u can see it Image
Adding $SVIX Image
Adding global bond yields
(1) points to the swap

#MESSY_MARKETS Image

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Keep Current with Expound the profound-Cut'n thru bs 1 layer @a time

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More from @frankoz95967943

Jun 26
This is beef.

Since covid its up nearly 175%

Many of you eat hamburger and madonnas.

This is why madonna's is no longer affordable.
πŸ‘‡πŸ§΅ Image
Here is mcdonna's vs beef

"Oz - they didnt collapse with beef going up??!"

correct.

And there's raisons.... Image
Enter currencies - zimbabwe'ing the currency has implications for the underlying

when u c it Image
Read 15 tweets
Jun 25
The Final Reckoning - A Nation Consumes Itself
πŸ§΅πŸ‘‡

I study the vix, geopolitics and currencies - trying to make sense of what is actually happening in the context of sound bites we get here or there from government.

Its hard to paint an actual picture from a single sound bite or news article.

But when you put them all together you paint a tapestry - some call it a masterpiece - others call it a dystopian hellscape.

For each point I will try to include a relevant news topic.

Lets begin.
The U.S. is not just struggling; it's in a death spiral.

Driven by hyperinflation & desperation, the government is making choices that solidify its descent into kleptocracy and civil breakdown.

Here’s the terrifying truth that is unfolding
Crypto: Not Innovation, But Capitulation.

The government, facing a worthless dollar, is now frantically trying to contain crypto by regulating it into the banking system.

This isn't forward-thinking; it's a desperate attempt to co-opt the flight from fiat before total loss of control.

Its an admission the dollar is no longer a store of value which is pretty damning for a government to turn against its own currency like this.

#DeDollarization #CryptoControl

abcnews.go.com/Business/geniu…
Read 35 tweets
Jun 17
Lets build.

This is my calculated vix.
The higher it goes the higher the vix should be.

πŸ‘‡πŸ§΅ Image
It is a function of bond yields.
Bond yields SLOW the markets down.
Its MORE expensive to borrow

The west runs on finance- price of debt (the yield) matters a lot, just like it matters to you when you buy a car a house or put chipotle on credit. Image
Zoomed in on right side Image
Read 42 tweets
Jun 17
A while back i calculated what the vix SHOULD be based on yields.

(1) you can see clear correlation
(2) it broke but the peaks still match
πŸ§΅πŸ‘‡ Image
The vix is a function of bond yields. Image
Read 9 tweets
May 5
Currency fiddling.
Pegs.
Making your currency artificially weaker -

This is all great when you are attempting to game the system.

Until one day it blows up in your face.

πŸ‘‡πŸ§΅ Image
I have an open quiz, go ahead and take it before moving forward - cause its important to understand the game....
So what happened to TWD?

well, the game is "make our currency weaker so we can export more"

This has been going on a long time - they arent the only ones doing this.
Read 48 tweets
Apr 23
Its wednesday.

Lets break your brain again.

This is a currency thread.
πŸ§΅πŸ‘‡
This is complex, so clear your mind, get some coffee and relax.

You are in charge of a country call it "MyCountry" with a currency called "Denaro's"

In the past you invested heavily to build your factories and vities to make things as efficient (read low cost) as possible.
Now you want to increase trade.

What do you do?

You weaken your currency - now, your products compared to the world are cheaper than anywhere else.

Your orders explode.
Read 59 tweets

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