Amazingly, it now seems that the FED has "printed" so much money,
and placed it in the hands of the rich and powerful that these elites are flooding the bond markets with their Greenspan Dollars! Thus inverting the yield curve!
The preference of the elites for "long term" investments has driven the long end of the bond market up in price...but down in yield.
Because, alas, the FED only "controls" the short end of the curve.
Also, as the elites' easy money flees the recent asset inflation in stocks, real estate and commodities...the long bond is still the best "parking place" for this excess cash or "cold money"....as opposed to the hot money of the Greenspan Bubble Daze...
Also odd is this notion that the FED is not really trying to control "demand inflation" or "wage inflation" as in the past...the China Miracle has solved that old problem!
Rather, the FED is "secretly" targeting Asset Inflation, which comes about from too many rich people and big companies chasing too few "investable assets."
But, as the rich flee the "hard assets" of the various Greenspan Bubbles...they end up back in the bond market, thus inverting the FEDs yield curve even more.
For Example:
If the Dow fell to 6000, where would the elite Dow "refugees" go? Most likely into long bonds, JUST TO AVOID that part of the rate curve that the FED has the most control over! Of course this can't go on forever...because EVENTUALL the FED CAN trash the economy has it did back in the late 70's and early 80's.
SO WE ARE NOW SEEING THE CATCH-22 END OF GREENSPAN'S BUBBLENOMIC MIRACLE IN THE 1990's.
