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To: Ironyman who wrote (3503)	2/28/2003 1:15:09 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 5423

extremely low short rates, combined with unprecedented monetary expansion, credit extension, and open monetization of principal govt securities... makes for a sharply inclined yield curve despite a TENS yield of 3.9%, we have a sharp yield curve with the longend almost 4x the shortend, the credit market is making a very quiet statement price inflation is around the corner also, confirming this is the recent widening of the spread between the TENS yield and the TIPS yield since summer, this TIPS spread has opened up all future inflation gauge indicators are rising dangerously now I believe price inflation comes first from rising commodity prices then next from Asian imported components and finished products TIPS = treasury inflation protection something security? sure, lowered shortend rates pushed down by FedFunds has enabled TENS yield to drop from mid-5% to sub-4% but I would not attach too much significance to sub-4% the real story is with TIPS spread and future inflation measures e.g. ECRI gauge (I think) it is funny how surprises always come they hit the people who overlook signals or aint bright enough to know how to read anything / jim