Money Supply, Money Supply, Money Supply…

Did I mention money supply?


Inflation is the act of inflating money supply.  The cost effects will show up later, somewhere or everywhere, eventually.  The FOMC just acknowledged the ending of the sanitary half of Operation Twist, while keeping the other half – the inflationary half – intact and ongoing.  Inflation is a little below their objectives after all… ha ha ha.

See the beautiful consolidation of the graph above.  That is called a bullish consolidation.  With T bonds indicating a deflationary backdrop… ha ha ha… there is no longer any public outcry against the inflators.  Where are the angry mobs of austerity now?  Blabbing about the Fiscal Cliff is where they are.

‘How you like me now??’ Ben has said to the gold bugs for nearly 1.5 years now.  Well, he just became passive toward the gold bugs once again.  Gold has been in a pretty consolidation as have the Twisted Yield curve and that graph above for 1.5 years.

Today’s announcement – pending the completion of the final Twist remnants – clears the way for the consolidation to break.

Party on Garth.  Deflationists not invited.

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