30 year / 2 year yield curve forecasting deflation event directly ahead?

By Gary Tanashian

The 30 year / 2 year Treasury yield curve has been on a steady march higher since 2007.  This makes sense since that was the year things started falling apart in inflated, debt saturated developed global economies, led by the nation that showed 'em how it's done when it comes to economic management by inflation; the US.

When long term yields are rising faster than short term yields, it is a sign of stress building toward either a breakout in inflation expectations or, as has been the case thus far since 2007 (and really, since the age of Inflation onDemand began in 2001), impending reversal of the excesses.  Unfortunately, in an age where economies are managed by inflation (by monetization of Treasury/Sovereign debt in service to increasing money supplies) these reversals tend to be shall we say, violent. Continue reading "30 year / 2 year yield curve forecasting deflation event directly ahead?"