By Matthew Piepenburg
Many, of course, can make an equally valid case for rising rather than sinking yields when (not if) the extreme and fantasy-like Fed money printing so critical to YCC simply gets too crazy and blows apart.
In such a scenario, un-supported bond prices would tank, sending Treasury yields and rates to the moon rather than below the waterline.
The good news for gold, however, is that such a scenario doesn’t change the end result for precious metals or the aforementioned case for negative real yields.
That is, if YCC fails or collapses under its own weight, and thus yields skyrocket rather than sink, the foregoing scenario just expands rather than unwinds.
Stated otherwise, if the Fed were to ever lose control of YCC and thus yields spiked, interest rates and inflation would also spike, up to and including a setting for hyper-inflation.
But so long as inflation rises higher than rising yields, which it would in such a super-inflationary scenario, we still get the same result: negative real yields.
And as we like to say, all roads, and indicators, point toward gold. Toward this end, the importance of negative real yields as an indicator of gold price is worthy of real consideration. https://goldswitzerland.com/a-titanic-indicator-for-golds-rapidly-rising-future/