The Great Steepening
During covid, the bond market inverted. To avoid collapse of the bond market the fed was the only one who could step in and print money to buy assets. It&#x27;s the right thing to do. Nobody is saying they were wrong to do this. Nixon made this possible to do and was inevitable to happen. Though Nixon placed it on manufacturing in the USA. Since his time, manufacturing was shipped out of the borders.<p><a href="https:&#x2F;&#x2F;tradingeconomics.com&#x2F;united-states&#x2F;central-bank-balance-sheet" rel="nofollow">https:&#x2F;&#x2F;tradingeconomics.com&#x2F;united-states&#x2F;central-bank-bala...</a><p>The problem is that they had to do this during the financial crisis and they were clearly unable to exit these &#x27;assets&#x27; literally casting shadow on them being labelled assets to begin with. You can even see in 2013-2014 they had to buy more.<p>They had over 10 years to exit these &#x27;assets&#x27; and failed to do so. Even in 2019 there was a temporary dip and then rebuy right before covid.<p>They say they will be doing $1T&#x2F;year but that isn&#x27;t anywhere near where they must go. You can extrapolate where they must go by tracking the line pre-2008. At $1T a year, it will take minimum 7 years to exit.<p>You&#x27;ll notice that this 7 years is too long. It&#x27;s 100% certain that another event will occur before they are complete in which they must buy more. Even ignoring that future prediction, it&#x27;s 7 years of pain.<p>So what&#x27;s about to happen for sure? The bond market will be taking some hits bigtime. We&#x27;re talking about major negative real yields. The money will come out of retirement funds. Not exactly a prediction given bonds have taken a -2% hit already.<p>Here&#x27;s the real prediciton:<p><a href="https:&#x2F;&#x2F;tradingeconomics.com&#x2F;united-states&#x2F;money-supply-m2" rel="nofollow">https:&#x2F;&#x2F;tradingeconomics.com&#x2F;united-states&#x2F;money-supply-m2</a><p>M2 says there&#x27;s 40% inflation coming. At 7.9% that&#x27;s in the area of 3 years.<p>BUT that 40% doesn&#x27;t just stay 40%. How does it increase? It actually requires the Fed to exit that ~$7trillion right this month to keep it at 40%. If they don&#x27;t and they clearly are not planning to do so. We can look at M1 and see where it might go.<p><a href="https:&#x2F;&#x2F;tradingeconomics.com&#x2F;united-states&#x2F;money-supply-m1" rel="nofollow">https:&#x2F;&#x2F;tradingeconomics.com&#x2F;united-states&#x2F;money-supply-m1</a><p>So there&#x27;s about 400% to deliver. In their current plan of 1 trillion&#x2F;year. The USA is saying they are locking in ~200% over the next 3 years. They are saying inflation is going MUCH higher.<p>Mid term election won&#x27;t have any major impact on this. 2024 on the otherhand? The real inflation numbers will be out then. Practically handing the election to the republicans.<p>Meanwhile those of us who aren&#x27;t in the USA. What are we about to do? We&#x27;re going to look at new reserve currencies that are more stable. Hence why biden is talking about the new world order. USA will no longer be top dog.