Written by Rick Ackerman, Rick’s Picks
Rates on the Ten-Year Note appear to be breaking out after pushing above 1% last week for the first time since March. Driving the move are fears that reckless monetary and fiscal stimulus have finally kicked off an inflationary spiral. If so, the Fed is about to lose control of interest rates.
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From a technical standpoint, the key level is March’s 1.26% peak, and it seems almost certain to be tested. When resistance there fails as we should expect, this will lay bare the fraud of stimulus. It will also make perfectly clear that every penny of the implicit borrowing done to sustain the illusion of economic recovery will have to be repaid. But by whom? The answer to that question will determine whether it is inflation or deflation that ushers in the Second Great Depression.
My strong opinion, which I’ve been writing about for more than 30 years, is that deflation will win.
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