The US Treasury (UST) Bubble is the mutha lard of the whole corrupted sistema. It is a coin clipping operation with output deflected or looted to the Crime Syndicate. Obviously the day has already past when incomes will suffice to pay both for essentials and interest payments. Then the whole Ponzi system will collapse by having become an unbearable and unworkable scandal. Accordingly the Crime Syndicate will introduce their widely telegraphed ‘Cashless Society’—which would make abject slaves of everyone.

Many, including me, have scratched heads in disbelief as to how this con has persisted so long. I have long ago quit trading this scam of a market. But, now there are clear indications that smart money, aka commercials aka manipulators aka the Crime Syndicate have shorted the hell out of both the notes and bonds.

Unless one is of the belief that the Fed has omnipotent control and is always 100% friendly towards this immense market, then ultimately fundamentals can take hold. The most obvious is credit quality and the utter fraud of the UST AAA rating. If truth about this ever gets in gear, the Treasury market will unravel fast. The method for smaller investors to play this is the TBF etf.

Other factors include the old school notion of supply and demand. In addition there is potential for sentiment shift or aversion/recoil. My former podcast partner Lee Adler is as keen observer of this as anybody. Having spotted the extreme commercials position I was curious about what he is saying. Seems to combine.

At the long end, demand for Treasuries has been consistently declining. That did not matter much as Treasury supply was steadily falling from 2009 through 2015, but it will start to matter now. As Federal Revenues have fallen precipitously since the third quarter of 2015, the decline in new Treasury supply has ended. If the drop in revenues is not reversed quickly, Treasury supply will begin to trend upward.

We don’t need to be expert economists to know what declining demand and increasing supply will mean for bond prices and yields.

With indications growing that the world’s central banks have gone completely insane, investors are increasingly recoiling from playing along with the con. Money is moving into short term government paper in ever increasing waves as traders, banks and financiers become increasingly risk adverse amid the growing evidence that central banks have lost control, as if they ever had any.

Neither bonds nor stocks are likely to fare well under these conditions. It’s beginning to look as though all the trends are starting to move in the wrong direction.