BONDS PLUNGED ON THE JOBS NUMBER....BUT THE STAGNATION PART OF OUR NEW "STAGFLATION" WILL SAVE THE BOND MARKET... BONDS SHOULD NOT FEAR THE JOBS LIE... INDEED THEY SHOULD WELCOME IT BECAUSE IT MEANS HIGHER RATES AND A STRONGER DOLLAR DOWN THE ROAD...WHICH WILL SUPPORT BONDS LONGER TERM.
THE DOLLAR ROSE ON EXPECTATIONS THAT THE FED NOW HAS THE GREEN LIGHT FOR RATE HIKES...BUT IN A STAGFLATION ECONOMY THAT COULD BE PROBLEMATIC...
AND RATE HIKES WILL SOFTEN THE ECONOMY EVEN MORE...AND SPENDING COULD PLUNGE...WHICH WOULD BE DOLLAR NEGATIVE...UNTIL RATES GET TO A LEVEL WHERE PEOPLE ARE ATTRACTED TO YIELDS...
NET NET THE ELITES HAVE BOUGHT THEMSELVES MORE TIME TO FIGURE OUT WHAT TO DO NEXT...
BUT TIME IS RUNNING OUT ON THE DOLLAR...THE REAL DECLINES IN THE DOLLAR AND THE REAL RISE IN GOLD AND OIL...WILL REQUIRE SOME HARD DECISIONS FROM THE FED SOON...
THE UNDERLYING "CONSUMPTION NUMBERS" WILL BE WEAK THIS SPRING AND SUMMER...BECAUSE THE CONSUMER CAN NOT SPEND "BIG LIES" LIKE WALL STREET.
SO INTERESTING TIMES AHEAD FOR BERNANKE AND THE FED...
