The Commentary:

“Dear CIGAs,

The big news today was the price action in the bond market. They were OBLITERATED at noon, CDT, as demand for the auction was much weaker than expected. Bonds were mercilessly murdered once news about the poor demand hit the market wires.

With commodity prices across most markets moving higher today and the CCI again strong, I think it is safe to say that fears of deflation have now given way to fears of inflation. Quite simply – bond traders are terrified that the plague of locusts loosed upon the nation by the Administrations’ insanely reckless spending orgy, are now going to devour the sustenance of the land. Investors are positioning themselves accordingly.

Today, the worst of all possible worlds hit the monetary authorities – the equity markets dropped, the bond market collapsed, the dollar was weaker continuing its recent slide and commodities were all higher. I am not sure what trick they intend to pull out of their hat but whatever it is, it had better be good because the market is speaking in no uncertain terms that the jig is up and no one is swallowing the line that we can borrow our way into prosperity. Heaven help us especially the mortgage industry which must be spinning in their rooms at what they are witnessing in the interest rate markets.”- Dan Norcini, More at JSMineset.com