The Fed is headed for an annual operating loss for the first time in 108 years. They will soon be forced to print the money to cover their expenses. A conundrum, indeed!
Rising interest rates reveal the consequences of exorbitant debt and leverage. When the free money disappears, what remains tends to flow into real assets.
The yield curve just inverted, a signal that has accurately predicted 10 out of the last 10 recessions. As investors exit the bond market, where will they go?