“Come on baby, let’s do the twist,” Chubby Checker crooned back in 1960, helping ignite a dance craze of that name and other twist-themed records like The Peppermint Twist.
About that time, the Federal Reserve adopted a yield-management program, naming it in honor of the dance, Operation Twist.
The idea was to flatten the yield curve, the relationship between short-term interest rates and long-term rates, by selling short-term instruments and using the funds to buy long-term government debt. Increased demand for the long-term debt decreased long-term interest rates; simple supply and demand Economics 101.
The dance fad passed, but Federal Reserve and Treasury Department finagling of the yield curve continue.
I awoke today to learn that Treasury Secretary Scott Bessent had announced massive buybacks of long-term treasury debt to address interest rates and general panic in the world-wide bond market.
This stuff interests me and should interest you. Recently, the U.S. has been intervening, along with the Bank of Japan, to halt a collapse of the yen.
Now, here’s another measure that might help that, and certainly will impact U.S. markets.
The usual idiots among the Democrat Party and Lamestream media have rushed out their Chicken Little, the sky is falling rhetoric. When in doubt, they blame President Trump.
Trump’s celebratory dance does look like a funky twist, but . . .
. . . how soon they forget the 2011 twist operation, while the country was headed by one Barack Hussein Obama. That was okay and just normal operations with a Democrat pulling the levers.
If the Trump administration does it, it is high treason.
Understand, no matter which party occupies the Oval Office, we spend as a federal government a lot more than we take in via taxes. The national debt – the one they actually admit to without including net-present value of obligations to Social Security and Medicare — is nearing $40 trillion.
Trump and Bessent are trying to keep your attention from that and preserve the financial markets. They didn’t create the problem, but they are trying to deal with it.
You should be at least mildly pleased. And, no, this isn’t going to cause runaway inflation, the 9-plus percent stuff we endured under Clueless Joe Biden. It might even help things on that front.
Janet “Mother Hubbard” Yellen missed chances while serving as Treasury Secretary to extend the terms of national debt, going to 30 years and such when interest rates were ridiculously low. Instead, she kept issuing very short-term debt. Now that rates are rising again, and all that short-term stuff is rolled over at higher interest rates, the payment for interest on that debt has reached about $1 trillion or so annually.
We are in trouble, with a capital T.
How do you protect yourself?
The way I do it is with gold, silver and miners of the shiny stuff.
News of another Twist operation today pushed gold up $188 or so an ounce and silver was plus-$3.68 an ounce.
This came after both had been clipped hard yesterday. Today’s rises more than made up for the fallback yesterday.
In the long run, price appreciation in the precious metals, although not as precipitous as today, should continue.
It’s enough to make a guy want to do a celebratory twist dance, with Chubby wailing his heart out in the background.
Sam Ross Jr's site 