The Bonds Bursting in Air
Most people spend way more time watching the stock market instead of the bond market. That is an enormous mistake.
The global bond market absolutely dwarfs global stock markets. This flow of capital is essential to modern life and bond traders are known to be especially savvy when it comes to understanding money and markets. Bond “vigilantes” love to trump government schemes.
A Sea Change
Nations across the globe are printing money (debt) in desperation mode to plug holes caused by the ongoing financial crisis. History is being made while American dolts look no deeper than Jon and Kate’s juicy divorce morsels. You must watch the bonds.
The largest bond market in the world is represented by U.S. Treasuries. The dollar used to be the global reserve currency and players from all corners of the earth trusted in the safety of U.S. Treasuries. Fool me once …
What exactly does U.S. debt stand for at the present time?
• A decayed and abused privilege
• Amounts of money that will never be paid back
• Amounts of money that requires strain to even be serviced
• Fraud and greed courtesy of the NY/DC Axis of Weasels
• Socialist dreams of central planners
Our newest administration plans to meet ongoing adventures as well as new goofy ones by raising money through issuance of new debt. Try the 50 percent number on for size. Yes, the U.S. budget and its gigantic deficits will require half to be paid by borrowing from anyone trusting enough to continue the sham.
The current annual budget deficit is projected to be a record $1.75 trillion!
A mere trillion dollar deficit was unthinkable not too long ago. If foreigners and stateside institutions balk at this task the Fed will step into the gap and purchase U.S. debt. You’d have to still believe in Santa to think this is any form of remedy. The bonds are now bursting in air. Once again, you’ve been stolen blind.
A Titanic Struggle
In a rush to “safety” global buyers panicked into short and long term U.S. Treasuries in mid-2008. 30-year bonds were bid up to the 142 level as interest rates plummeted. Since that time the going has been rather rough for U.S. debt. British credit ratings have recently been downgraded and the U.S. house is barely in less disorder. No merit badges there and the long treasuries are at a crucial support level.
Low interest rates are absolutely crucial to any possible economic recovery stateside. The free market demands higher interest rates to compensate for risk. The apparatchik interventionists believe they can hold back this tide.
Putting your money on their success is akin to purchasing shares of Fannie, Freddie, AIG, Lehman Brothers, and the entire spectrum of disastrously failed elitist sponsored enterprises. Sooner or later, this market will implode and bring pervasive higher interest rates with it.
This beloved country has long been at the mercy of foreigners to buy our bonds as well as our stocks. China holds $740 billion in U.S. government bonds and is just now closely inspecting the merchandise. The present verdict is no mas. The Treasuries are due for a bounce higher at any time but this debt as well and the dollar are mortally wounded. It’s a fear trade only at this point. Default will enter the conversation sooner or later.
Protect yourself with gold, silver and other tangible assets.
Invest Resourcefully,
Rusty
