from Kerry Lutz’s Financial Survival Network
Craig Hemke gives us the real story on transitory inflation. No one is focusing on why they’re saying it. It’s all about yield curve control. The US cannot afford higher interest rates. The Fed is controlling yields and real interest rates. Interest on treasury debt cannot exceed 2 percent or we’re all scr-wed. It’s a case of Fed jawboning to shape perception and reality. After this fails, they’ll have go to policy pronouncements. And when that fails, then they will actually have to do something. The biggest question is, who will buy US government debt when it’s yielding less then inflation? Answer: the Fed. Repo madness strikes again. Reverse repos are hitting record levels, spiking. Banks are over-stuffed with reserves. Lots of interesting stuff going on, setting us up for an interesting month of June. 3 weeks to the next FOMC meeting. Fed said they’re going to lengthen the maturity curve of their QE program. Shorter term maturities have been crowding out buyers and driving short term rates to near zero. So the Fed is on to 5-7-10 year debt. This is what yield curve control is all about. Gold continues to progress higher off the double bottom. In case you hadn’t notices, we’re currently in a gold bull market. $2300 gold is right around the corner. Get ready. On the inflation front, we’re seeing cost-push and demand pull inflation. Higher wages are being used to entice workers back into the labor force. Negative real rates equal higher gold prices and we ain’t seen nothing yet.