A documented sequence, not a forecast. It states what would falsify it, and where it has failed before.
Trigger
Term premium rising while the policy rate falls; weak long-dated auctions
How it runs
- Long yields rise despite central bank easing
- Mortgage rates rise with them, so housing does not respond to the rate cuts
- Equity multiples compress because the discount rate is set at the long end
- Gold and hard assets re-rate as a hedge against the currency rather than against inflation
- Government interest costs rise, crowding out programme spending — which is felt in every public solution in this Atlas
- Pressure on the central bank to monetise increases, which raises the term premium further
What it means for a household
The young pay for the old's entitlements through either inflation or taxes. Housing stays unaffordable even when the central bank is trying to help.
What would prove it wrong
Falsifier
Foreign and domestic demand at auctions staying strong with normal tails. Japan has run far larger debt ratios for thirty years without this chain running, because the debt is held domestically.
Where it has failed
Precedent
The prediction has been made repeatedly since 2010 and has been wrong every time so far.
Its neighbourhood
Everything this entry connects to directly. Click any point to follow it.
Watch these to confirm it
If the chain is running, these move in this order.