Loading ...TLT:TIP
I am not a bond guy
BUT…this ratio is important
TLT ( 10 year bond price ) divided by TIP ( Inflation adjusted bond price)
It is dropping and has broken down from a H and S Top
This means TIP is falling faster than TLT
A Prize to the first who can explain in lay terms if this means Inflation or Deflation ?
All I know is as bonds drop Interest rates rise…so help please
TLT is 20 yr right? TIP usually Notes.
If Tip falling faster, short term yield rising faster than long term I guess.
oh yeah, left out the consequence of the inflation adjusted. back to the drawing board.
Muses…
Nominal interest rates are rising faster than inflation adjusted interest rates. Hmm.
Ergo nominal interest rates are rising faster than inflation.
Real interest rates are rising faster than inflation. Why?
A shortage of liquidity. The liquidity crises is ongoing. Why?
Federal reserve is reducing the balance sheet at the same time permitting interest rates to rise. Its not supplying enough dollars to maintain the “everything bubble.”
Emerging markets (and others) borrowed mega dollars when the dollar was falling and interest rates were low. Now interest rates are rising while the supply of dollars is falling so they liquidate assets to raise dollars to repay debt.
Then asset prices must fall. So, deflation…? Deflation!
Muses. Just muses.
🙂
Sounds like Mises Muses