The Fed Must Cut - US Bonds Rising in Price – US Yield Curve is Falling - Is Deflation Coming? - SNB Drops Interest Rate to Zero - Mind Control Propaganda

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THE FED MUST (AND WILL) CUT HERE

THE FED MUST CUT - US BONDS RISING IN PRICE – THE US YIELD CURVE IS FALLING - IS DEFLATION COMING?

For the rest of 2025 and into 2026, BOOM is expecting US Treasury prices to rise in the secondary market, lower mortgage rates in the USA, higher US bank share prices, increased US home loan originations, increased US house prices, a boost to the US money supply, a rotation towards higher prices in stocks that generate reliable dividends (that are currently above 3 %) and a falling Yield Curve (right across all durations). That’s a lot to digest. Along with those developments, BOOM is expecting continued weakness in US GDP growth (but not a bad recession) and low levels of CPI inflation.

In other words, in the US financial markets, BOOM expects a rotation into conventional asset prices that generate yields. BOOM is not so positive about assets that have no yield such as resource commodity prices, digital casino-chip commodities such as Bitcoin, all the various Crypto tokens and precious metals such as Gold and Silver. Investors should reach for yield and thus, non yield assets are expected to under-perform relatively in price. In the stock market, stocks that do not generate dividends are expected to fall into relative dis-favour compared to dividend yielding stocks.

YIELD CURVE DYNAMICS

The best way to keep a close watch on how all these parameters develop over the next 12 months is to watch the US Yield Curve closely from 3 months to 30 years duration.

CURRENT US YIELD CURVE

Over the last five years, the globally important US Treasury Yield Curve has undergone dramatic change. In mid February 2020, just before the Covid Panic-Demic emerged, it had slowly assumed a flat shape and even threatened to invert. In response to the panic and fear, the curve quickly fell right across the maturity spectrum.

On 20^th February 2020, the 30 Year T Bond Yield fell below 2 %. That was exactly one week after the (false) Covid “threat” was announced by the White House with its Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (Covid 19) Outbreak.

Fast money rushed into short dated Treasuries for safety and the curve rapidly assumed a positive shape. On March 9^th 2020, the 30 Year Yield fell to the extraordinary level of 0.9370 -- below 1 %. It rose above that level but continued to weaken and on July 30^th 2020, it closed trading at the extraordinary level of 1.198 %. At that stage, the Curve was still positive from 3 months to 30 years duration. Throughout 2021, the Curve held a positive shape. Then, in early 2022, it started rising especially from 2 years to 30 years duration. The Federal Reserve was late to the party and held the short end down for waaaay too long.

In BOOM’s opinion, the Fed either simply does not understand what it is doing or it is simply unwilling to change its stance when circumstances demand it. In other words, it is BOOM’s opinion that the Fed tends to be waaay too conservative and is therefore arguably incompetent.

By mid 2022, the rising Curve was obvious to everyone (even the Fed) and the whole curve then started to rise rather dramatically in response to CPI inflationary pressures that had been triggered by massive US Government spending during 2020 (during Trump’s first Presidency). Government spending reached record levels. In fact, Operation Warp Speed and the fear of the (false) Covid “threat”, boosted the US Government’s expenditure to stratospheric, record levels (almost 48 % of GDP) and triggered huge CPI inflation. The US Government (under Trump) panicked and caused the global CPI inflation surge – there is no doubt about that.

For almost all of 2023, the Yield Curve from 3 months out to 30 years was inverted and the US stock markets climbed a Great Wall of Worry. That pattern continued throughout 2024 until, finally, around last Christmas, just as the disastrous Biden Presidency came to an end, it assumed a positive shape and everyone breathed a sigh of relief. But the Fed is, again, late to the party and has held its interest rate settings too high for too long, resulting in the short end of the curve being too high for all of 2025 to date.

This cannot last, the Fed MUST admit its error ASAP and lower its key rate. Then the short end of the curve can fall and the whole world of finance can breath more easy. That SHOULD happen at the next meeting of the FOMC (or earlier).

The recalcitrance of the Fed was highlighted last week on 26^th June when the official US GDP numbers for first quarter GDP Growth were revealed to be a NEGATIVE number -- Negative 0.5 %. Shock, horror.

The collapse in GDP growth suggests that Trump has again triggered severe economic consequences with unwise policy settings ….. with help from Jerome Powell at the Fed. In his first Presidency, Trump triggered dramatic increases in global CPI inflation by spending way too much in 2020 on “Operation Warp-speed” and other nonsense in the ill-advised response to a viral “threat” that, quite frankly, did not exist. In his second Presidency, in 2025, he has launched into an unwise Tariff war against every other nation on Earth and has caused global economic fear to reign resulting in a contraction of US GDP growth. And while he has been doing that, Powell has kept the Fed’s interest rate setting too high for the circumstances.

As they say in exasperation in Italy — Mamma Mia (!)

In summary, we have an unwise US Federal Reserve that does not seem to understand its economy and an unwise Executive Branch of the US government that does not understand its economy – so what else is new?

BOOM has offered his expert services to both parties but the phone has not rung yet. Perhaps Americans’ obsessive and apparently endless quest for Fame, Fortune, “Threats” and Enemies does not allow wise counsel?

LARGE US BANKS WILL BE FREED FROM SOME CAPITAL CONSTRAINTS

Last Wednesday, June 25^th, the central bank of the United States (the Federal Reserve) actually made a good decision and voted to advance a proposal that would ease the enhanced supplementary leverage ratio that determines the amount of capital that large banks must hold against relatively low-risk assets. Under the proposed reform, the amount of capital that banks must set aside will depend on the size of the role they play in the global financial system, equalling half of their “GSIB surcharge”. The Fed board voted 5-2 to advance the proposal. The board’s vote means that the proposal will now be open for public comment for 60 days.

The GSIB surcharge is an additional capital requirement imposed on Global Systemically Important Banks (GSIBs) to reduce systemic risk in the financial system. It is calculated annually based on specific criteria and is designed to ensure that these banks maintain higher capital levels to absorb potential losses.

However, this decision will allow US banks (especially large US banks) to expand their loan books more readily. Credit expansion will wash over the US economy if this decision is put into practice.

Upon reading the Reuters announcement of this decision, BOOM immediately thought that US bank stocks would rise strongly on the news and that the 10 Year T Bond Yield would fall due to increased buying pressure.

And that is (exactly) what has happened since last Wednesday. For large banks in the USA, this is a huge incentive to increase the size of their loan books and to decrease the interest rates charged. Borrowers will be delighted and can be expected to line up for loans. Loan originations will subsequently increase from their present lows and the US housing market will get an extra boost in sales and prices.

If you look closely at the share prices of the large US banks, this decision was clearly anticipated prior to the actual announcement.

The Top 6 US banks, judged by the size of their Loan Books, are JP Morgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley.

So – let’s look at the share price performance of those banks over the last 12 months, the (falling) yield on the US 10 Year Treasury and the Bank Loan Originations chart provided by FRED (the Federal Reserve Bank of St Louis).

JP MORGAN

BANK OF AMERICA

CITIGROUP

WELLS FARGO

GOLDMAN SACHS

MORGAN STANLEY

THE YIELD ON 10 YEAR US TREASURIES — now falling, falling

IEF — An ETF that reflects 7 – 10 Year US Treasury Demand on the Secondary Market

US LOAN ORIGINATIONS – (from FRED) — Chart over 10 Years illustrating the disastrous Biden years and the recovery since late 2024

THE SWISS NATIONAL BANK WOKE UP EARLIER -- SNB DROPS KEY INTEREST RATE TO ZERO TO AVOID DEFLATION

On June 19^th, the central bank of Switzerland (the Swiss National Bank SNB) dropped its key interest rate to Zero after Swiss CPI inflation fell below Zero in May. Consumer Inflation has been falling progressively now for 2 and a half years. The SNB has been steadily dropping its key interest rate since March 2024.

Another reason for the drop in rates was to discourage the strength of the Swiss Franc compared to other currencies. The Swiss Franc has been strongly rising against the US Dollar since October 2022. Soon, the SNB will be forced to buy yet more US Dollar denominated assets in large volumes to weaken the Franc.

SWISS CPI INFLATION

SWISS INTEREST RATE SETTINGS

SWISS FRANC (VERSUS THE US DOLLAR)

THE POLY CRISIS — FAME FORTUNE AND FEAR

We are being constantly bombarded with narratives of fame, fortune and fear,

The current list of “threats” being foisted upon the people of the advanced Western economies includes the following issues — access to Food, Energy, Water, Air (CO2), Safety, Infections (“Pandemics”), Resources, Health and Healthcare, Climate, Extreme Weather, Money/Finance, Housing, Fertility and Truth. There can never be enough threats.

REMEMBER — FEAR IS THE METHODOLOGY OF MIND CONTROL

Greta Thunberg – “I want you to feel the fear that I feel every day”

People, in the advanced, Western nations especially, are being subjected to almost endless fear generating propaganda on a daily basis. Almost all of it uses threat ideology to generate anxiety. And the mainstream media, governments and the education systems in each nation are deeply involved in this.

It draws inspiration from Utopianism and Malthusianism. Malthusianism is the idea that human beings are the problem and need to be reduced in number.

For almost 3 decades now (perhaps longer), we have been attacked with threat ideology. BOOM sums up this attack on civil society by explaining that either they will control us or we will control them. Thus, the identity of “they” is paramount in any discussion of the conflict.

WHO ARE “THEY”? — Totalitarianism in all its various forms

“They” include anyone who promotes fear narratives, especially global ones and who suggest that there is only one (always global) solution – which must be imposed upon everyone. This is why they are most often referred to as Globalists. In this context, it is a Geopolitical term, not an economic one.

“They” are mostly unelected, non-representative people involved in planning a central control apparatus as the “only” solution - globally. The World Health Organisation is an excellent example. If they are unelected, then they must be selected. That truism is worthy of some thought.

They — these unelected, selected people — essentially propose a totalitarian world view that borrows from the well worn ideological pathways of Socialism, Marxism, Communism, Fascism, Utopianism and Malthusianism all of which have already caused great human suffering over the last 200 years of history.

This is all very deliberate in BOOM’s opinion. The aim is TOTAL CONTROL of the entire human population of the planet and its resources by a small group of central planners. In order to achieve this, endless “threats” must be identified to consequently raise anxiety levels to unsustainable levels. Why? In order to raise suggestibility. This is, quite simply, the road to compliance, control and, above all else, Power.

So, what exactly, is suggestibility?

Do what they say, or else.

Suggestibility is the quality of being inclined to accept and act on the suggestions of others. Some people (perhaps 70 - 80 %) are much more susceptible to suggestion and especially so if they are put into a state of fear and/or anxiety from an authority figure. The remaining 20 % are generally not so susceptible to suggestion in most circumstances. They are natural sceptics who question everything they are told but especially if it comes from an authority figure or institution.

Stanley Milgram, who died in 1984, was an American social psychologist known for his controversial experiments on obedience conducted in the 1960s during his professorship at Yale. The Milgram Shock Experiment, conducted in the 1960s, tested obedience to authority. Participants were instructed to administer increasingly severe electric shocks to another person, who was actually an actor, if they answered questions incorrectly. Despite hearing the actor’s screams, most participants (70 - 80 %) continued administering shocks, demonstrating the powerful influence of authority figures on behaviour.

“Anyone who can make you believe absurdities can make you commit atrocities.” Voltaire

In BOOM’s view, the majority of people in the advanced Western economies (the 70 - 80 %) are now well prepared by decades of “threats” and fear to accept even outrageous suggestions from authority figures, especially from government. This was proved beyond reasonable doubt during the Covid campaign. Many people are now mentally prepared and ready to become enslaved. In fact, they are effectively captured and perhaps even suffering from Stockholm Syndrome.

So — what is Stockholm Syndrome?

Stockholm syndrome is a proposed condition or theory that tries to explain why hostages sometimes develop a psychological bond with their captors. It is a psychological response to abuse or captivity, where victims bond with their captors or abusers. Some victims actually defend their captors/abusers in court cases held after the event.

FEAR GENERATES ANXIETY WHICH GENERATES SUGGESTIBILITY WHICH TRIGGERS COMPLIANCE

BOOM makes the proposition that 70 – 80 % of the population of Western nations are now suffering from Stockholm Syndrome.

To some degree or another, they believe that the Covid virus was a deadly virus that killed millions of people of any age everywhere and anywhere on the Planet during the year 2020 (it didn’t). They also believe that another “Pandemic” of horrible infection can happen at any time in the future (it can’t and won’t). They believe that the climate is changing at catastrophic speed (it isn’t) and that they are to blame (they are not). They believe that extreme weather events are much more common than previously (they are not). They believe that there are too many people on Earth (not true) and that this number should be reduced (again not true). They believe that air travel is dangerous (when the statistics strongly reveal otherwise). They believe that terrorism and cyber-terrorism are likely to happen to them (their chances are close to Zero). They fear financial collapse (not likely). They fear nuclear war (not likely). They fear premature death (a rare event). They fear heart disease (it has been steadily declining). They fear biological warfare attacks (extremely unlikely).

They are now fearing cow farts.

So — what “Vison” of the future is being proposed?

“YOU WILL OWN NOTHING AND BE HAPPY”

“You'll own nothing and be happy" is a phrase promoted by the private, unelected organisation, the World Economic Forum (WEF). The phrase is based on a 2016 essay by Ida Auken of Denmark, a Danish politician and member of the Social Democrats political party. The essay describes a future in which a hypothetical person relies on the “sharing economy” for almost all of their needs.

The phrase “You'll own nothing and be happy" has been used by critics who accuse the WEF of desiring restrictions on ownership of personal property.

If you will own nothing — who will own everything?

The Future -- ENDLESS FEAR, TOTAL CONTROL AND COERCED COMPLIANCE

‘If you want a picture of the future, imagine a boot stamping on a human face – for ever.’

This is a famous quotation from George Orwell’s 1949 novel, Nineteen Eighty-Four. The words are spoken by O’Brien, the grand inquisitor of the totalitarian regime in Orwell’s novel. O’Brien has no first name in the fictional novel. He works deep inside the Inner Party for the Ministry of Truth.

In the now famous book, O'Brien is an undercover agent of the Thought Police, and is completely loyal to the Inner Party. He is part of a false flag resistance movement whose goal is to find thought-criminals (anyone who has ideas deemed to be unacceptable by The Party), lure them in by pretending to be on their side, then arrest and help them to become "sane" (to comply ideologically with The Party).

O'Brien explains that reality only exists within the human mind, and since the Party controls everyone's mind, it therefore controls reality.

“But always – do not forget this, Winston – always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face – for ever.”

Source Document for “You Wil Own Nothing and be Happy”: https://medium.com/world-economic-forum/welcome-to-2030-i-own-nothing-have-no-privacy-and-life-has-never-been-better-ee2eed62f710

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In economics (and finance), things work until they don’t. Do your own research. Make your own conclusions.

BOOM does not offer investment advice.

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