Bond Vigilantes Are Finally Attacking the US!

Look at the 10y UST. Just 2 months ago, the UST 10y was around 2.5%. It has shot up to 3.3%. What's happening? The bond vigilantes are attacking the US. Bond investors no longer believe that the US government can repay back the bonds without drastically devaluing the USD.

Who are the culprits? Virtually anyone who has a stake in this. It could the Asian central governments, particularly the Chinese to get back at the US for lecturing them. It could be hedge funds. It could be the oil sheiks of the Middle East. It could be investors fearing inflation. Anyone.

What's going to happen? The US government will certainly defend the UST by buying up as much as they can to prevent yields from rising too fast. Don't worry, the US government can afford to buy up their UST as long as inflation is below 4%. It is good for stocks and commodities because investors who took profit on the US government can now recycle capital into more productive assets, like stocks and commodities.

The next surge in stocks and commodities has begun. The music will stop when inflation comes up. Nothing lasts forever.