In this report I cover the early market action from London on Tuesday, July 17th, 2018. I look briefly at the precious metals, the stock market, the dollar and the oil price.
Today I revisit the bond market and look at the U.S. 10-year Treasury yield and how it is, arguably, the most important indicator foe all the financial markets. I explain how the bond market and yields determine the price of money and credit and how since 1981 the bond market has provided an abundance of easy money and credit.
I argue, nevertheless, that for the last two years the bond market and interest rates have started turning and that we could be in a very long term cycle of tight credit even though it does not fell like it for now.It has been the easy money and credit that has allowed of the geometric rise in public, corporate and private debt of the last 35 years.
My conclusion is that the present cycle is one that will look very different from the one we have seen since 1981 and that it is not necessarily a bad thing.
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