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Major Market Moves and indeed, Trends, often begin with a Triggering Event (like the one coming later this month See Deepcaster's Alert posted March 16 for its identity) so it is essential to identify these Triggers in advance for Key Market Sectors and to deploy one's investments and Trades Accordingly, to Profit and Protect.
And one Very Important Trend which is becoming a Trigger is the accelerating loss of confidence in the $US and resulting spike in yield on U.S. treasuries and increasing inflation.
And this prospect of increasing U.S. Debt ad infinitum has already kept the $US weak, bouncing around 90 basis USDX recently on the prospect of increasing Inflation.
That Drop shows the Fundamental underlying weakness of the Ostensibly Healthy Economy unjustifiably (See Note 1 Shadowstats Chart) and Equities Markets. I.E., they have been and are high because they have been relying on Easy Money from the Central Banks. But The Fed and others have started to withdraw stimulus by engaging in QT Quantitative Tightening. QT plus Interest Rate Increases will surely deflate Bubble Assets like Stocks, sooner rather than later.
In addition, the prospect of more money printing (to cover the increasing Interest on U.S. Debt and increasing U.S. Debt) has kept both the $US and U.S. Bonds weak and they will weaken them further.
Indeed, we reiterate, recent moves in The Bond Market and the $US Now reflect what we have been forecasting, that Inflation is coming. Thus, Bond prices and the $US have begun to tank as we forecast, mainly because Sovereigns, Businesses and Consumers are all too overleveraged and inflation is coming.
And, indeed, with the prospect of U.S. Debt increasing by at least $1 Trillion annually, the Bond Markets Debt Ceiling Alarm Bell is Ringing Loudly. When Debt Defaults mushroom, that will Trigger Key Sector Crashes. (There is an "easy" Solution which would reduce the U.S. Deficit by one Half a $Trillion in 10 Years (see Carrying Capacity Network).
In sum, the increasing U.S. Debt (already 105% of GDP when President Trump took office!) is one main reason why the U.S. 10-Year and $US continue to weaken.
Important Impending Trigger
The Next Move Down in the 10-Year which drives the yield over 3% (likely later this year) will be a Key Trigger. Be prepared.
To be clear, One Main Cause of these Triggers/Trend is that the U.S. and Businesses are too over-leveraged. And too over-leveraged mainly because The Private, For-Profit Fed and other Major Central banks have kept Rates too low for too long and thereby artificially elevated Equities and other Financial Assets to benefit the Mega-bankers and Wall Street, while hurting Seniors, Savers and Retirees.
But the oncoming Inflation will reverse this process by diminishing the price of Financial Assets and increasing the Prices of certain Real Assets, e.g., especially certain Commodities (which Deepcaster identifies in recent Alerts).
In sum, because of the Worldwide over-leveraging, Defaults will increase, and Equities will soon (i.e., Q2 or Q3) Crash again as we. This will temporarily cause a flight to Ostensible Quality, i.e., back into U.S. Treasuries for a while, so their prices will rise temporarily.
Couple the foregoing with the IMF's Serious Warning last April that over 20% of U.S. Corporations are at risk of Default if Rates Rise even Modestly (because they are over-leveraged), and you see why Soc. Gen has predicted "This doesn't end well." Deepcaster agrees that this world-wide overleveraging (facilitated by The Fed and other Central Banks) is perhaps the Greatest Threat to the Economy and Markets and will soon Trigger a Major Move very soon catalyzed by the impending late March Deadline which we reveal in the Deepcaster Alert posted March 16.
Best regards,
Deepcaster
March 15, 2018
Note 1: Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported March 13, 20182.21% / 9.96%
U.S. Unemployment reported March 9, 20184.15% / 21.8%
U.S. GDP Annual Growth/Decline reported February 28, 20172.49% / -1.60%
U.S. M3 reported March 8, 2018 (Month of February 2018, Y.O.Y.)No Official Report / 4.42%(e) (i.e., total M3 Now at $18.502 Trillion!)