– The MOASS is here.
– There is a global shortage of both US dollars and high quality collateral for debt (10-year US Treasury bonds). Why would the dollar be rising despite the high CPI prints? It’s simple. To borrow, one must have collateral.
– CS’s Zoltan Pozsar explained in Nov. 19th Global Money Dispatch that currently, this demand is caused by Europe. “the ECB bough too much , reducing net supply via , and it topped it up with TLTROs… This week, the collateral shortage in Europe spilled over into the FX swap market: on Tuesday it became cheaper for a euro deposit holder to pay a premium and swap euros for dollars and buy Treasury bills with those dollars than to buy German bills.”
– While I won’t go into it, it is speculated that Citadel has a great short exposure to 10-year US Treasury bonds, through their repo market arm, Palafox. May or may not be true, but it is evident that someone (probably every hedge fund) is short USTs and they are also short GME . GME by extension is a bond market proxy. As long as the correlations hold, it can be traded.
– What is also true is that Large and Small speculators are record short 10 Year T Note , while commercials are record long. Bond market is reached a level where was trading at 50+ previously and is higher now than what it spiked to during GME’s first squeeze to 500. Somebody is about to get to get blown up.
Bond Market Options (MOVE) leads GME by 15 days. Timing of MOASS, Dec.3:
You might get one more smash down (I expect a smash in bonds in a risk parity event before a squeeze), but I am confident this is about to happen. I’m not even going to give a price target, but it’s over 4 digits for certain.
If you are short GME , do you even know who is on the other side of your trade? Retail “apes”? No no no!
Causation always produces a correlation. Liquidity takes time to flow through the economic machine.