Should you worry about inflation?
Many investors don’t care about what is happening to long term interest rates as seen on today’s TYX chart (30 year bond yields).
But … should you worry about long term yields?
The answer is yes, and the reason is that it has a correlation relative to the level of inflation.
Up until now, consumers haven’t really been concerned about inflation. This attitude is probably similar to people and diseases … most people don’t worry about getting cancer until after they get it.
For those who look at a long term monthly chart of the 30 year yields, they know that we are at the very cusp of ending a 15 year down trend, with the possibility of beginning a new multi-year up trend.
We won’t show that monthly chart today because we post it every day on our Advanced subscriber site. However, we will post the current weekly chart of the 30 year yields.
As you can see on today’s weekly chart, something very significant happened last Friday.
The 30 year yields jumped up and above the June 2009 to February 2011 resistance line. This is implying that Bernanke and the Fed have lost control over keeping rates interest rates low. In reality, they probably don’t mind because this could be construed as an opportunity to inflate away current debt levels.
In any case, the direction of the current trending should be of concern to consumers and it should be the basis for a change in their long term personal strategie
