Liquidity is gone, the people do not want to hold gov’t debt. Yellen has a plan to gobble up the longer term bonds via short term.  Here is an article/study on past ‘twisting’.  Armstrong writes more detail of this in his newest report he has for sale on his site.  Targets for her to start this gig after Christmas. Nice report and worth the $150 clams.  I believe gold smells this:

“Operation Twist was much smaller than QE2 in nominal terms. Nonetheless, as Table 1 shows, the programs are comparable when measured relative to GDP or the Treasury market. First, although Operation Twist was about half as large as QE2 relative to GDP, it was similar enough in magnitude to be informative. Second, if changes in the supply of long-term Treasuries have any effect on long-term Treasury yields, then the initial quantity of long-term Treasury securities in the market should be a better benchmark for the size of each program. By this metric, Operation Twist was closer in size to QE2. Third, to the extent that debt issued or guaranteed by U.S. government-sponsored agencies such as Fannie Mae or Freddie Mac are close substitutes for Treasuries, then the relevant market arguably includes all of these Treasury-guaranteed classes of securities. Relative to this market, Operation Twist was even bigger than QE2.”

 

frbsf.org/economic-research/publications/economic-letter/2011/april/operation-twist-effect-large-scale-asset-purchases/

Type in ‘operation twist’ in the above link search box for the article. This is the only way I can get it to work.

 

https://www.washingtonpost.com/business/the-squeeze-that-has-the-us-treasury-thinking-about-buying-back-bonds/2022/10/21/ab36bb1c-5138-11ed-ada8-04e6e6bf8b19_story.html