This Week: Gold And Palladium Delivery, UK Gilts Buckle, Japan Dumps Rice Reserve To Tamp Down Food Prices

And the US Housing Market doesn't look too good neither.

Japan Long Term Bonds Not Alone on Verge of Implosion

The UK 30Y bond yield has broken through 30Y resistance. We are at yields here above the recent Liability Driven Investment scheme crisis, yields not seen since the 1998 Asian financial crisis that drove capital from east to west. The 30Y gilt is at 5.41% and there is no resistance until around 7%, and after that, 8%. How much higher can we go before something systemic breaks here? Not much, I believe.

In the UK 20Y gilt we are just barely above resistance and about to move significantly higher, it looks like from the technicals at least.

Speaking of Japan, They're About to Dump Rice on the Market

Remember two incarnations ago when we were all in Germany together in 1922 and they dumped gold on the market in an effort to resuscitate the failing paper mark and it worked for, like, a few months? Well, they're doing it in Japan, except instead of gold, they're dumping rice, not at a competitive bid, but a fixed price, with the aim of specifically manipulating prices down fast and artificially. Bloomberg: (my bold)

Japan will sell additional stockpiles of rice at a fixed price with an aim to halve soaring costs, newly-appointed agriculture minister Shinjiro Koizumi said as the country heads toward a summer election.

The government aims to release an additional 300,000 metric tons of its stockpiled rice with negotiated contracts at a set wholesale price of around ¥10,000 per 60 kilograms, according to the agriculture ministry. That should halve the retail price to about ¥2,000 per 5 kilograms, down from its current average of ¥4,268 per 5 kilograms, the ministry said.

“It’s not possible to respond to the people’s needs if we were to repeat what we have always done,” Koizumi said Monday, as he announced that the government would abandon its past method of selling its rice stockpile as a competitive bid. The fixed-price cheaper rice could appear in storefronts by early June, Koizumi said.

Prices will certainly dip, but for how long? Well, in 2023, Japan consumed 8.1M metric tons of rice. 300K is 3.7% of 8.1M. 3.7% of one year is 13.5 days. So yeah, uh…