Unfortunately, we are being lulled into a false sense of security. Investors are leaving the Euro and rushing to US treasuries, hence interest rates are low.
The long term prognosis is not good for treasuries. Since the economy is not doing well, banks are investing in treasuries as well. When banks do not invest in the private market, wealth creation shrinks, leaving less capital for investment, both in treasuries and securities. Sooner or later this capital is going to dry up and rates on treasuries will go up.
“Unfortunately, we are being lulled into a false sense of security”
Not me, The US Treasuries are the last chair in this game of musical chairs. The only thing left after that are things with true value (commodities/skills in demand).
I predicted this several months ago. There will be a flight from Eurozone investments into US investments. After all the other debt-ridden Euro countries begin their sovereign defaults, then investors will begin looking at what a horrible state the USA is in regarding sovereign debt, and BAM!!!!! True crash begins.
In the meantime, i’m riding the wave across the Atlantic and trying to make a few bucks. Already hedging with food and other necessary durables to outlast the inevitable shortages of gas and food.
Good morning Zimbabwe!!!!!!!!