Posted on 06/21/2013 10:31:27 AM PDT by blam
U.S. Treasury Bond Market Implosion Has Officially Begun
Interest-Rates / US Bonds
June 21, 2013 - 06:02 PM GMT
By: Graham Summers
The QE Infinite parade officially ended yesterday when Bernanke hinted at tapering QE later this year or in mid-2014.
I first warned about this in mid-May writing,
"If Bernanke is going to step down (as hinted by his decision to skip out on the Jackson Hole meeting) he’s not going to want to leave with the Fed going at QE 3 and QE 4 full throttle.
Instead his best bet would be to take his foot off the gas a little bit, giving his replacement a little room to maneuver if things get ugly.
This is precisely what Bernanke is trying to do. However, there is another far larger issue at work here.
The primary driver of stocks for the last four years has been the hope of more Fed stimulus. This hope has put a floor under ALL asset prices as market participants KNEW the Fed was involved in the markets. As a result EVERYTHING (stocks, bond commodities, even currencies) has been artificially propped.
By calling for the end to QE 3 and QE 4, the Fed has begun to remove these market props. Which means that the markets are now going to start adjusting to where assets prices REALLY SHOULD BE.
Take a look at the spike in the 10-year Treasury yield:
This is just the start. I warned that higher rates were coming noting a collapse in bonds in Europe and the emerging market space.
This could easily become truly catastrophic. The world is in a massive debt bubble and the Central banks are now officially losing control. The stage is now set for a collapse that could make 2008 look like a joke.
If you are not preparing in advance for this, the time to get started is NOW.
ping
I would like to prepare but exactly how does one do that.
Rising interest rates is bad for stocks, bad for bonds, bad for real estate, bad for gold, not great for cash, bad for job employment, bad for starting a business.
Other than pay off all floating rate debt and borrow like crazy for long term, I can’t think of what to do.
I keep reading that you/we ought to be in cash.
But...someone will be along shortly to explain.
Maybe catastrophic for governments and the “housing recovery” (which would hurt governments also via less property tax).
I would like to make more on savings myself.
” I keep reading that you/we ought to be in cash.
But...someone will be along shortly to explain.”
No... GOLD!!!
Oh wait, no, SILVER!!!
Or, T-Bills, oh, sorry, those are crashing.
How about cash, guns and ammo?!
Who the heck knows!?
In order to prepare for what is coming you will need food, water, guns, ammo, heirloom seeds, medical supplies, tools, land, etc. When the fiat currency becomes worthless, the new medium of exchange will be gold and silver. You are almost out of time to prepare. Be afraid, be very afraid.
I don’t care. Let it fall.
Ping!
Dig a hole. Get in it.
America’s chickens have come home to roost.....
Beer, soda, liquor, popcorn and potato chips.
Yep. Get survival supplies and hunker down in a bunker with a radio tuned to glenn beck and cry yourself to sleep. Its a cruel world.
“Beer, soda, liquor, popcorn and potato chips.”
If that’s the case, I’m properly diversified.
be we have an adult dtr who lives with us...we have a dtr and her husband and a son and his wife and their two kids to worry about....
its irresponsible to just give it all up because we're scared and angry...I think we owe it to our children and grandchildren to keep trying to right this ship...
Higher interest rates would destroy a large number of the biggest financial institutions on the planet.
They would have to nickle up for all the interest rate swap contracts they conned others into buying.
But there isn’t anything backing most of those contracts, so they would default, and you would see other institutions and municipalities taking the hit.
That’s when hyperinflation kicks into full gear!
We’ve been in these straights before...course in the past we had not sold ourselves out with reckless off-shoring. I feel sorry the kids growing up today and the generation that will come after them...what a mess they will get.
If that’s the case, I’m properly diversified.
Yes, If I was going beyond this I would consider Tater Tots,
Fritos, ice cream and frozen pies. What ever you do stay away from veggies or fruit....
It’s going to do what it is going to do, no matter what I do. I guess that is irresponsible on my part. As long as the market has to be subsidized to prop it up, it is destined to fall. That isn’t because of my irresponsibility. I’ve always worked to stay debt free, believing that real wealth and ownership means it is mine, not a creditors. I’ve tried to instill those values in my kids. That is real responsibility. I will vote for candidates who will be good for the private sector, business, energy growth and manufacturing, policies that will bring real wealth to the US. That is me being responsible in a way that will have lasting results, if enough people do the same thing.
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