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To: orkrious who wrote (256912)8/21/2003 1:36:53 AM
From: Jim Willie CB  Read Replies (1) | Respond to of 436258
 
short end of yield curve reflects price inflation expectorations within the next several months
NOT MUCH EXPECTED
if not much expected, then not much bond yield needs to be delivered to investors

long end of yield curve reflects price inflation expectorations several years away
MORE AND MORE EXPECTED
since more is being expected with each passing week, bond yield needs to be higher, in order to satisfy eventual erosion to principal in those later years

a steep yield curve implies rising future price inflation expected
so it must be compensated to any guy willing to offer up his money for investment (confiscation)

the opposite is an inverted yield curve, which correctly foretold a recession
back in autumn 2000 it was inverted
the recession occurred one year later, right on time

now a yield curve is becoming steeper
it is likely to become more steep than it should
because the long-dated maturities (TENS and 30s) saw yields go down too much
on the direction and Mr Pied Piper Horse's Ass Dept of Inflation Secretary GreenScheiss

steep means price inflation is coming
which leads to miner shares rising in value
been this way for a long time, plenty of precedence

if these explanations are not sufficient, keep asking questions
and I will attempt to answer
huge importance, what Heinz mentions
gold is the price inflation ultimate hedge
been that way for a century
/ jim