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Old 12-11-2021, 09:54 AM
 
1,766 posts, read 1,225,355 times
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Because this is not REAL INFLATION. Actually “inflation’s” days appear to be numbered.
Consumer prices have gone up, way up, though for very different reasons apart from money or even something resembling economic health. The inflation narrative is nothing but a true hysteria. Inflation wasn’t just reported as one possibility among several paths, it has been described everywhere as already fact, guaranteed, done-deal. The bond market’s on other hand very clear, historically dependable, utterly consistent yet very simple and straightforward keep sending contradictory signals that this so called INFLATION is fake and NOT real inflation.

Listen and observe the yield curve and the bond market rather than fall into these counterproductive fits of self-delusion and false inflation narrative.

Good Luck!

 
Old 12-11-2021, 10:52 AM
 
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I'll bite. I think the inflation is real and not transitory. What does transitory even mean? Six months? One year? Five years?

Sure, some of it is supply chain issues and COVID-related disruptions, but then add energy, food, autos, labor and shipping, homes all with huge price spikes. There is something more here. Something not transitory.

It is almost as if the current and prior adminsitrations opened up some kind of fire hydrant spigot of spending. But no! Why would adding trillions in borrowed spending crowd out and disrupt normal economic activity. How silly! Bond rates are still low because the Fed is buying up (creating false demand) bonds.
 
Old 12-11-2021, 11:17 AM
 
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Quote:
Originally Posted by lpc123 View Post
I'll bite. I think the inflation is real and not transitory. What does transitory even mean? Six months? One year? Five years?

Sure, some of it is supply chain issues and COVID-related disruptions, but then add energy, food, autos, labor and shipping, homes all with huge price spikes. There is something more here. Something not transitory.

It is almost as if the current and prior adminsitrations opened up some kind of fire hydrant spigot of spending. But no! Why would adding trillions in borrowed spending crowd out and disrupt normal economic activity. How silly! Bond rates are still low because the Fed is buying up (creating false demand) bonds.
Thanks for your reply.
Transitory should mean temporary......NOT real inflation. What if HIGH gasoline prices are behind all this high consumer prices? Just last month fuel prices alone would almost have met the Fed’s 2% inflation. In other words, if the price of every other item apart from motor fuel in the consumer bucket hadn’t moved one cent, the US CPI still would’ve been an uncomfortably, unusually high.

I have no LOVE for the FED but they didn’t do any money printing lately. Our Government did with their EPIC helicopters. Trillions were electronically delivered directly into consumers hands who then flipped them into Amazon accounts filled with orders for goods coming from overseas creating supply chain issues and disruptions.
 
Old 12-11-2021, 03:31 PM
 
Location: Flyover part of Virginia
4,218 posts, read 2,462,786 times
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The markets are heavily rigged and manipulated. Nothing is real anymore.
 
Old 12-11-2021, 07:03 PM
 
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Well, a bond fund that I follow just had a large drop in price. And if I take the average per share monthly distribution, multiply by 12 to get annual yield, and divide by current price, I get an 8% annual yield on current price. And this is a sovereign bond fund, not junk bonds. That signals something, eh?

Of course, the bonds held by this fund are not the ones whose prices were being kept up by the FRB's bond purchases. If you artificially support a price, then the yield stays artificially low, right?
 
Old 12-11-2021, 07:08 PM
 
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FAX is a closed end fund which invest in foreign sovereign bonds in US dollars,last I look ,it is 3.99/share.
yield must be north of 6%
 
Old 12-12-2021, 02:30 AM
 
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a high yield is not a good thing when it comes from a falling share price …it is total return that counts.

fax has lost 5.43% ytd including all dividends. it lost over 6% the last 3 months
.

horrible performance this year.

fax has the same duration as a total bond fund ..which looking at fidelity total bond is pretty much flat for the year in comparison to a 5.43% loss in fax.

the last 5 years total bond has beaten fax as well.

Last edited by mathjak107; 12-12-2021 at 03:13 AM..
 
Old 12-12-2021, 07:58 AM
 
1,212 posts, read 735,185 times
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Morgan Stanley is predicting the 10-year Treasury Note at 2.1% in 2022.

In a November 08 speech, Clarida predicted 2022 core inflation at 2.3%.

In September, the FRB predicted 2022 core inflation at 2.2%. But the FRB will update predictions on Wednesday.

And the U.S. administration is predicting that inflation will subside such that they can go ahead with their fiscal stimulus legislation.

Basically, everyone is predicting that the end of the FRB bond-buying will reduce inflation. But MS also expects a rise in longer-term interest rates and that is what I have been saying. Longer-term interest rates rise in spite of inflation being controlled and that's a fundamental of the ending of FRB bond-buying.

Well, MS is predicting the year 2022 as less inflation, a hot economy, a drop in stocks, and a rise in longer-term interest rates. So that situation could be the result of less monetary support of all financial markets but noted in the form of the 10-year Treasury rate. Well, they also expect the S&P 500 at 4400.

Blackrock says that 2022 will be a stock picker's year.

Last edited by T Block; 12-12-2021 at 08:36 AM..
 
Old 12-12-2021, 08:06 AM
 
10,864 posts, read 6,499,506 times
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Quote:
Originally Posted by mathjak107 View Post
a high yield is not a good thing when it comes from a falling share price …it is total return that counts.

fax has lost 5.43% ytd including all dividends. it lost over 6% the last 3 months
.

horrible performance this year.

fax has the same duration as a total bond fund ..which looking at fidelity total bond is pretty much flat for the year in comparison to a 5.43% loss in fax.

the last 5 years total bond has beaten fax as well.
thats true,all fixed income investment wili take a beating when FRB raises rate,FAX expense is high,as it takes more research to invest in foreign sovereign and private securities.
interesting read,as it switch from Aussie bonds to Chinese,HK,Malaysia,Singapore
 
Old 12-12-2021, 08:09 AM
 
10,864 posts, read 6,499,506 times
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ten year treasury at 1.486 % right now,Japan 0.056%.
I bet foreign buyers will still eat ours despite rising rate,inflation and a weaker dollar,thus giving support to our ten year treasury
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