by Karl Denninger, Market Ticker:

And do remember, death of the dollar has been predicted for quite some time.  With the DX sitting at 90, it doesn’t look very dead although I’d rather see twin peaks on a woman than a 20 year weekly chart.

Do remember too that the bond vigilantes have allegedly been slain and are now-devoured by vultures.  We’ll see.  The TNX is right up at a zone of what used to be support, failed hard in early 2020 and is now trying to break back about support-turned-resistance.  Does it hold and turn it back downward or do we get a breakout on longer-term yields?

In the meantime we have a crisis of confidence brewing that people are ignoring, coming from India.  A monstrous population with a heavy Covid-19 problem, they stratified themselves into provinces where they relied on Remdesivir and others which adopted Ivermectin in recent weeks.  The differences are…. well….. stunning.

If this worm turns here in the US it could get pretty ugly.  It might even get BBQ ugly.

TRUTH LIVES on at https://sgtreport.tv/

Add to it Pelosi wanting to investigate the January 6th “riot” (in which we now have video of Capitol Police Officers inviting the protestors inside!) and is attempting to draw parallels to 9/11.  Well, that’s a joke.  So was the last one.  Who got hammered over that in government?  Nobody, and there plenty to go around with two of them being named “Bush.”

The thing about markets is that its all confidence when you get down to it.  I love how people always point at The Fed but the fact of the matter is that The Federal Reserve only exists because of an act of Congress, the Federal Reserve Act sets forth both responsibilities and powers in that act, The Fed has ignored the strictures serially and Congress has both the authority and ability to stop it and not only hasn’t, they’ve enabled and furthered it!

Will Congress stop?  Not until they have to.  When do they have to?

Oh, I dunno.  Lumber futures are only up by roughly a double in the last year, and that’s wildly beyond the old all-time highs.  Corn is sporty, but not beyond highs.  Ditto for wheat and oats, which does translate into consumer prices, but again, not doing the moonshot wood is.  The wood problem will eventually cream Real Estate; right now it’s fueling the bubble pricing.

Do recall that oil is nowhere near where it was back in the “good old days” before 2014.  A much-bigger problem is the stupidity in our energy generation and delivery system.  Colonial anyone?  Unfortunately that’s not a monetary or, really, a spending problem. It’s a stupidity problem, it took years to get this bad and it will take years if not a decade or more to fix.  It also won’t get fixed so long as there’s no rule of law and thus no consequence for not fixing it.

Oh, and as for not fixing it, well, that applies to all manner of other games that tend to goose the markets too, doesn’t it?

I see wobbles, but not “short the phone book” stuff — yet.

But I do think you ought to be careful; people tend to think that higher inflation can be good for markets, and to a point it can be, but there’s a point where while on paper it’s good the policy is a disaster since the money doesn’t buy anything.  What’s worse in that situation, however, is that for nearly everyone if that happens then your 401k balance is the least of your problems.

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