Treasury Yield Curve Inverts!

March 29,2022

* dollar gets old in the overnight markets

* Daily beatings continue for Gold & Silver

Good day… And a Tom Terrific Tuesday to you! OMG! What a real Chamber of Commerce Day  here in S. Florida yesterday! I don’t know if I’ve ever sat in my seat at Roger Dean Stadium on such a perfect day! My beloved Cardinals proved once again that they can’t hit, and lost, but even that outcome wasn’t enough to spoil the day!  Chuck, Kathy, Tim, Anita, Gus and Diane all couldn’t say enough good things about the day.I onlmenty have 1 more game to attend down here and that won’t come until Friday this week. UGH! It wasn’t a picture perfect day for Gold yesterday, so we’ll get to that in moment, but first… My favorite song from SuperTramp greets me this morning, as I sit here and list to their song: Hide In Your Shell…

Well, the daily beatings for Gold didn’t end yesterday, and the shiny metal lost $35.80 on the day, while Silver also mounted up the losses, with a 62-cent loss on the day… So, once again, I’m confused as all hell about how Gold & Silver are getting treated, with all the fundamentals out there in their favor… I got to thinking last night, that I wonder if these daily beatings of Gold are a master plan by the U.S. Gov’t. to get the price of Gold so low that it would hurt Russia to sell their Gold into this market… You can’t begin to tell me that I’m wrong on that… That’s my story, and I’m sticking to it! So, Gold closed yesterday at $1,923.60, and silver closed at $25.01…

I have to wonder at this point, at what level the price manipulators will be satisfied with? 

I will say this though, the rise in Treasury Bond yields, is quite enticing, and could be a reason for the daily beatings of Gold & Silver, but… and you knew that was coming, right?  But… even with the 10-year Treasury yield at 2.50%, it’s still a negative yield, when you factor in inflation.  Now that 2.50% yield doesn’t look so enticing does it? 

In the overnight markets last night, the dollar got sold to the tune of 4 index points in the BBDXY (dollar index).  Gold, however isn’t getting any different treatment with the dollar getting sold, and the shiny metal is down $9 in the early trading, while Silver has lost the $25 handle, as the price has dropped 32-cents to $24.68… I looked high, I looked low, I looked around the corner, and under the hood, but still can’t put my finger on the reason for this selling today. 

I think I’m going to pack up my ball, bat and glove, and head home. and not deal with these stupid, mixed up, manipulated markets any longer!  That’s my attempt to get an April Fool’s Day joke on you before we get to April Fool’s Day. For no matter how stupid, mixed up, and manipulated these markets are, I’ll always have something to say about them, you know me… right? 

Well, the Bank of Japan (BOJ) was in the news overnight. The BOJ announced that they will attempt to control their yield curve for Japanese Gov’t Bonds (JGB’s)… We all know that the Fed/ Cabal/Cartel have controlled the Treasury bond yield curve for a long time, before they finally got out of the bond buying business a month or so ago. 

The Japanese yen fell to a multi-year low VS the dollar yesterday, and the BOJ doesn’t have a problem with that… What they do have a problem with is the rise of JGB yields… Of course, fundamentals say with inflation rising around the world that yields should be rising to combat inflation, but in these stupid, mixed up, manipulated markets the BOJ is going to fight fundamentals… 

Well, bully for them! Can you tell that my words there are dripping with sarcasm? well, they were! 

While I was on vacation, the Fed/ Cabal/ Cartel hiked interest rates 25 Basis Points (1/4%), and basically they played out their meeting just like I told they would… They hiked rates 25 Basis Points and then told the markets they had more rate hikes up their sleeve…  Fighting 15% inflation (according to with 25 BP rate hikes is akin to arranging the deck chairs on the Titanic… 

So, the Russin ruble has stemmed the tide of selling and has come back strong… The ruble trades with an 87 handle this morning, which is a far cry from the 107 it traded it before Russian President, Putin, announced that he was only going to accept rubles for payment of his Oil…  So, all the countries around the world that buy Russian Oil, had to go out and buy rubles to hold and then deliver VS receipt of the Oil… 

Just another nail in the dollar’s coffin as a reserve currency, folks… 

The data in the U.S. just continues to point to a very soft 1st QTR GDP, and then with inflation soaring, and GDP diving, this could end up really ugly for you, me and the guy down the street. Last week it was Durable and Capital Goods Orders both printing negative for February.  These things on the basis of just one print going negative don’t seem to be a big deal, but when taken with all the other negative or soft prints, they add up to a very weak economy… 

Oh, and briefly yesterday the U.S. Treasury bond yield curve inverted, which is normally a sign of bad things to come.  You see, usually 30 year bonds have the highest yield, and so on… but when the short term rates soar and inverts the curve, it is an indication that a recession is on the way… At least that’s how things have worked in the past, when the markets weren’t so stupid, mixed up and manipulated! 

I don’t have anything else to talk about today folks, so we’ll head to the Big Finish and call it a day, eh? 

The U.S. Data Cupboard today has the Case/ Shiller Home Price Index for January, which was before the rate hike, so I would expect this data to show home price increases in Jan. 

And that’s it for data today, folks…  Oh, this little ditty came across the screen this morning.. That in Spain, Producer Prices leaped by 41% last month! That’s crazy folks! So, it looks like soaring inflation is coming to the Eurozone… 

To recap… The dollar got sold overnight, and the daily beatings of Gold & Silver continued yesterday and in the early trading this morning. Chuck is about to call it quits because of stupid, mixed up, manipulated markets… Well, not so much, but he’s thinking about it!  The Treasury bond yield curve inverted yesterday, albeit briefly, but still, the indication is that a recession is heading out way. 

For What It’s Worth…  Well, I spent some time with this phenomenon this morning known as the inverted yield curve, and thought that this article probably explains it better than I did, and it can be found here: U.S. bonds: Treasury yields invert flashing recessionary warning sign (

Or, here’s your snippet: “U.S. 5-year and 30-year Treasury yields on Monday inverted for the first time since 2006, raising fears of a possible recession.

The yield on the 5-year Treasury note rose to 2.56%, while the 30-year yield fell to 2.55%. This is the first time the shorter-dated 5-year Treasury yield has risen above that of the longer-dated 30-year U.S. government bond since 2006 — just a couple of years before the Global Financial Crisis.

 At its high of the session, the 5-year yield hit a high of 2.67%.

To be sure, the main yield spread that traders watch — the spread between the 2-year and the 10-year rate — remained positive for now. And investors for the time being largely ignored the 5-30 negative rate spread, with the S&P 500 gaining for the day.

The 2-year yield jumped 4 basis points to 2.34% and the benchmark 10-year was down 2 basis point to 2.473%. 

Historically, the yield curve has inverted prior to recessions indicating their concern about the health of the economy.

“With the Fed set to hike into restrictive territory, the curve will invert,” said Seth Carpenter, chief global economist at Morgan Stanley. “As has always been the case in the past, markets will debate whether an inversion presages a recession. A policy mistake that causes a recession is clearly possible, but our baseline is that an inversion without a recession is more likely.”

Chuck again… Well, that’s it, it’s all about as clear as I can get this across, that this is in our future… 

Market prices 3/29/2022: American Style: A$ .7502,  kiwi .6901, C$ .8012, euro 1.1053, sterling 1.3103, Swiss $1.0689, European Style: rand 14.6170, krone 8.6272, SEK 9.3755,  forint 335.47,  zloty 4.2304,  koruna 22.1422, RUB 87.52, yen 123.50, sing .13591, HKD 7.8275, INR 75.80, China 6.3689, peso 20.04, BRL 4.7679,  BBDXY 1,196.87, Dollar Index 98.68,  Oil $106.87, 10-year 2.50%, Silver $24.68, Platinum $981.00, Palladium $2,298.00, Copper $4.66, and Gold… $1,914.20

That’s it for today… A watched a beautiful sunrise this morning as the sun rose out of the ocean… No clouds to distort the rise, and it was simply beautiful. Our company leaves today, and then it’ll just be me and Kathy here to get things ready to button up and get ready to leave on Saturday. That was some crazy scene at the Oscars Sunday night, eh?  My beloved Cardinals couldn’t find any hits in their bats yesterday, and lost to the Astros… One more game for me down here, and next week will be the start of the regular season! Tom Petty takes us to the finish line today with his song: Mary Jane’s Last Dance….  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!  Be Positive!

Chuck Butler