Comments on: Fun with the Yield Curve http://tomchappell.com/blog/2006/12/fun-with-the-yield-curve.html Yet Another Media Spotlight Sat, 19 May 2012 04:40:06 +0000 http://wordpress.org/?v=2.6.5 By: Bill Standley http://tomchappell.com/blog/2006/12/fun-with-the-yield-curve.html#comment-13 Bill Standley Tue, 12 Dec 2006 00:41:52 +0000 http://tomchappell.com/blog/?p=6#comment-13 Very cool, Tom -- thanks for posting it! The Yield Curve is indeed a useful tool to detect when the next bust phase of the Business Cycle begins -- unless the central bank can respond quickly enough to start the next round of credit expansion, which then begins the next boom. But to me, all this does is expose the great lie of fiat money, fractional reserve banking and central banking. When money no longer is backed by a real commodity, Of course, all of this begs the question: Should the price of money be manipulated by Treasury bureaucrats, or should market forces -- supply and demand -- be allowed to determine its price? Which begs another question: Since "money" today is really fiat money, and its supply is ultimately in the hands of central bankers and fiat currency, What is money today? The entire planet is now long into the modern era of fiat currency -- money that has no intrinsic value, its value being declared by government fiat. It's money simply because the law says it is, and everyone goes along with it. So far. Only the Austrian School economists have predicted the inevitable mega-booms and mega-busts that come from the modern fiat money, fractional reserve, central banking system. Very cool, Tom — thanks for posting it!

The Yield Curve is indeed a useful tool to detect when the next bust phase of the Business Cycle begins — unless the central bank can respond quickly enough to start the next round of credit expansion, which then begins the next boom.

But to me, all this does is expose the great lie of fiat money, fractional reserve banking and central banking. When money no longer is backed by a real commodity,

Of course, all of this begs the question:

Should the price of money be manipulated by Treasury bureaucrats, or should market forces — supply and demand — be allowed to determine its price?

Which begs another question:

Since “money” today is really fiat money, and its supply is ultimately in the hands of central bankers and fiat currency,
What is money today?

The entire planet is now long into the modern era of fiat currency — money that has no intrinsic value, its value being declared by government fiat. It’s money simply because the law says it is, and everyone goes along with it. So far.

Only the Austrian School economists have predicted the inevitable mega-booms and mega-busts that come from the modern fiat money, fractional reserve, central banking system.

]]> By: Chris Gibson http://tomchappell.com/blog/2006/12/fun-with-the-yield-curve.html#comment-12 Chris Gibson Thu, 07 Dec 2006 23:26:27 +0000 http://tomchappell.com/blog/?p=6#comment-12 Don't forget to let us know if/when the data switch sales start to tank again, as that may be the best leading indicator yet. :-) Don’t forget to let us know if/when the data switch sales start to tank again, as that may be the best leading indicator yet. :-)

]]> By: Chris Gibson http://tomchappell.com/blog/2006/12/fun-with-the-yield-curve.html#comment-11 Chris Gibson Thu, 07 Dec 2006 15:28:10 +0000 http://tomchappell.com/blog/?p=6#comment-11 That's a truly-neat graphic. I especially enjoyed the animated version. However, I should want to point out that today's yield curve is generally considered "flat" rather than "inverted"; this is still a cause for concern, and recently, the WSJ reported that economists from the Swiss Reinsurance Co. (a world leader in risk analysis) are putting the chance of recession in "the coming quarters at about 35%," based both on the fundamentals indicated by the current yield curve and the pressures of the weakening housing market. They also mentioned that the prediction of recession by the New York Fed puts the odds at 40% (this is based purely on a technical analysis of the yield curve); I found this interesting in comparison to Fed Chairman Bernanke's recent, typically vague and pseudo-reassuring comments regarding an economy in "deceleration...roughly along the lines envisioned." So, don't horde gold just yet, but it's probably not a good time to make a stretch to buy that yacht you've been eyeing. That’s a truly-neat graphic. I especially enjoyed the animated version.

However, I should want to point out that today’s yield curve is generally considered “flat” rather than “inverted”; this is still a cause for concern, and recently, the WSJ reported that economists from the Swiss Reinsurance Co. (a world leader in risk analysis) are putting the chance of recession in “the coming quarters at about 35%,” based both on the fundamentals indicated by the current yield curve and the pressures of the weakening housing market.

They also mentioned that the prediction of recession by the New York Fed puts the odds at 40% (this is based purely on a technical analysis of the yield curve); I found this interesting in comparison to Fed Chairman Bernanke’s recent, typically vague and pseudo-reassuring comments regarding an economy in “deceleration…roughly along the lines envisioned.”

So, don’t horde gold just yet, but it’s probably not a good time to make a stretch to buy that yacht you’ve been eyeing.

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