Invert Prevail

I have questions about yield curve .?
Strongly inverted yield curves have historically preceded economic depressions.??? What does this mean? what does negative liquidity mean here?
The opposite situation — short-term interest rates higher than long-term — also can occur. For instance, in November 2004, the yield curve for UK Government bonds (i.e. the bonds which the UK Government issues to borrow money – see gilts) was partially inverted. The yield for the 10 year bond stood at 4.68% but only 4.45% on the thirty year bond. The market’s anticipation of falling interest rates causes such incidents. Negative liquidity premiums can exist if long-term investors dominate the market, but the prevailing view is that a positive liquidity premium dominates, so only the anticipation of falling interest rates will cause an inverted yield curve. Strongly inverted yield curves have historically preceded economic depressions.
Strongly inverted yield curves have historically preceded economic depressions.
True… but look how fast the yield on bond rates changed last month “Feb 2008″. Bonds that were routinely sold for 3-4% jumped to @20% in a weeks time.
The reason rules of thumb and other guides seem out of whack and off kilter at this time.. has to do with the;
MZM or M-3 worldwide money supply [or all that is considered money and credit].
The textbooks are currently 2-3 years behind the curve. By the time the real shitt of things is recognized the long term damage will have already been done.
Study whatever you can about:
money supply…
inflation, hyperinflation…
MZM or M-3 reported, unreported…
Does this help any?
Bond yields
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