Invasion Of Lebanon Imminent, Lagging 10Y-3M Curve Explained, and the 45-Year Silver Cup and Handle

The 10Y-2Y curve has normalized. The 10Y-3M will normalize only with rate cuts, given 3M yields are more directly affected by the Fed's monkeying around.

War Rumors Again…

• Israel may invade Lebanon soon; potential market impacts include a rising dollar, pressured gold/silver, rising non-monetary commodities, and falling bitcoin.

• Treasury shorts hit new record highs across some maturities; bank deposits are climbing but very slowly.

• Silver's 45-year cup and handle pattern suggests a bullish breakout; historical Dow to gold ratio indicates stocks may soon fall hard relative to gold.

• 10Y-2Y yield spread normalizing; expect 10Y-3M to follow post-rate cuts, signaling a final monetary panic and dollar surge on Forex markets.

I'm hearing rumblings again that Israel is preparing to invade Lebanon within the next few days. There have been false alarms before and this could be a another one, but given that "negotiations" with Hamas have broken down, Israel has to do something so that 100,000 residents of the north can go back home rather than bum off the taxpayers wasting away in hotels for another year. The "negotiations" have been a joke for months since Hamas hasn't even been attending them.

If an invasion happens and Iran gets involved, markets are going to be affected, the dollar is going to rise on forex markets and gold and silver may be under pressure. I don't know what the short term effect on the metals will be, depends on how people choose to panic. But non-monetary commodities should rise and bitcoin should fall.

I may have to evacuate but that's another matter. I have plenty of places to go if I need to, but I don't think it will come to that. I'm not on the border, more to the south side of the Golan. The big action will be in the Galilee on the Lebanese border. I'm on the Syrian side.

COT Update on Treasury Short Positions and Gold

I've been doing a weekly update on the short positions on Treasurys and gold, because I think that's what much of the repo volume is funding these days.