Zeev's Turnips Patch-No Politics (ZEEV)

[JimWillieCB]

stress test will be examining USdollar - USTBond link
inflation from front door or back door, either way, inflation

front door:
escalating federal budget deficits from recessionary spending, wartime spending, security spending, stimulus financial spending

the immediate effect would be greater TBond supply, thus higher rates to entice investment
offset by the credit bubble mania continuation, but eventually overwhelmed by additional supply

back door:
tremendous need for govt spending, but done via monetization rather than financed spending

the immediate effect would be dollar devaluation from added supply
the lower dollar forces TBonds lower, with higher rates

either way, higher rates, lower dollar
the stress test will be more like an intelligence test administered to the FOREX, to examine the tight link to the TBond credit market

gonna be interesting
but what do I know?
I am just a Golden Calif ignoramus who worships a barbaric relic
/ jim