I'm surprised no one is talking about this. Interested to hear thoughts... I've attached a few examples. Some very strong moves to the upside, maybe Greece will be leaving after all and people starting to smell risk? Scale in image is over 1 year. [imgz=http://forums.silverstackers.com/uploads/339_10_year.jpg][/imgz]
Interesting to see all the major us equities indexes backwards for the year as well and this with half the market thinking that there won't be a rate rise this quarter (he other half not thinking there will be either but pricing it in anyway). I wouldn't be surprised if they actually make a june move and see the dow drop 500 points only to then never try again in case the market sees it's own shadow and plunges the US into another year of deep winter.
Bonds still have a long way to go. PIIGS above 7% (excluding Greece), Japan above 1% and the US above 3% before things get interesting
The writing is on the wall for the long bonds...it is the short end that could have a last run before collapsing. That is when things get interesting and this is what will drive the Dow to the 30,000 point mark. All that lovely capital desperately looking for a safe home that is not connected to any government.
Tend to agree if/when the Fed raises rates, it'll cause the share market to fall pushing capital into short-term sovereigns, however with so many short-term quality bond rates already in the negative territory, capital will at some point will begin to move into pretty much everything else chasing yield.
The Fed does not control the rate. The rates will rise as a consequence of the bond collapse. Once the short bond collapses, the only way to sell debt is to offer a higher rate on the bond. This will drive the interest rates higher and at a speed most people will not see coming.
Now some of you will say ..." They will just create money out of thin air and buy the bonds themselves to keep the brakes on rising interest rates"....very true but for every action there is an opposite and equal reaction. From the Master himself.. "Yet, we may see central banks forced into buying government debt when no one else will both if rates went negative or explode and capital flees government moving to corporate debt and shares as began to emerge during the Great Depression after the sovereign debt default of 1931. That may soften the rate rise, but it will merely transfer the debt into monetization without interest, and that will produce the ASSET INFLATION that should emerge. That will not appear because of an increase in money supply, but because of a collapse in PUBLIC CONFIDENCE."
He was talking about the impending bond collapse over 3 years ago.....it is hard to ignore that kind of insight, regardless of your opinion of the man.
from one of his reports in October 2012, "Because everyone is sitting there holding worthless government paper, we will see a collapse in bonds equal to if not greater than the fall of the Nikkei from 1989 or the Dow Jones Industrials during the Great Depression. The slightest up-tick in interest rates will cause a massive PANIC sell-off like we have never seen before. Those who think there will be some PEACE DIVIDEND when Iran falls are dreamers. Russia is rising from the ashes. China will soon be the Greatest Economic power on earth. Hello? The rise of Asia is on the horizon. Even in South East Asia the "feeling" is the United States has become irrelevant economically as China begins to dominate the region"
Peripheral yields are widening today, in particular Portugal. Expecting a bullsh*t Greek credit deal rumour to hit the news sites in 3, 2, 1......
