Tag: 10 Year Treasury rates

GOLDILOCKS IS DEAD

“Once you strip out the effects of the debt binge, the artificial stimulus via currency depreciation, and the fabled ‘wealth effect’ from the equity market runup, real GDP growth stripped-down to its core was the grand total of 0.7% last year. Potemkin would be proud.” – David Rosenberg

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It appears every president finds the religion of false economic narrative once they ascend to power. Trump never stops babbling and tweeting about the fantastic economy and raging jobs market since his election. He has embraced the stock market bubble as proof of his brilliant leadership, rather than the tens of trillions in debt propping up the most overvalued market in world history. Every president takes credit for any good news, spins bad news as good news, or blames the previous president for bad news that can’t be denied. The president has absolutely zero impact on the economy or stock market over the short term. It’s like taking credit for the sun rising in the east each morning.

The Big Lie method works wonders when you have a willfully ignorant, mathematically challenged, easily manipulated populace. I spent the entire Obama presidency obliterating the fake economic data perpetuated by his BLS, BEA and every other government agency trying to paint a rosy economic picture. I voted for Trump because the thought of Crooked Hillary as the president made me ill. Despite disagreeing with many of his economic, budgetary, and military policies during his first year in office, I’d vote for him again over Hillary in an instant. The thought of having that evil shrew running the country gives me chills.

Continue reading “GOLDILOCKS IS DEAD”

DOES THIS MAKE SENSE?

As I write this, the U.S. 10 Year Treasury bond is yielding 2.31%. It’s currently at a 16 month low. The Fed has been manipulating interest rates lower since 2010, but they have been dramatically reducing their purchases of Treasuries and Mortgage bonds. The 10 year Treasury yield should be rising, if the economy is truly improving. Instead it is plunging, indicating a recession. Real short term interest rates are already Negative. The entire financial system in the United States is manipulated, warped, and false. The free market does not exist. Everything is controlled and rigged by the Federal Reserve and their Wall Street owners.

Interest rates in a free market are supposed to reflect risk, debt levels and economic growth. Look at the bullet points below. Ireland’s debt levels are off the charts. Their economy is still in a shambles. In a free market only a fool would buy their government bonds. I wouldn’t buy their debt if it was yielding 10%. How could it possibly be yielding 1.63%, far lower than U.S. bonds? Spain is on the verge of revolution. Youth unemployment exceeds 40%. Their economy is a joke. Their debt load is unsustainable. How can their bonds be yielding 2.038%?

Is Ireland, Spain, France and Italy really a safer investment than the U.S.? Of course not. Europe is disintegrating before our very eyes. Germany is plunging into recession. The economic sanctions on Russia are backfiring. Not selling stuff to Russia hurts your economy. It’s going to be a cold winter in Europe, especially when Russia turns off the natural gas.  The EU has papered over their insolvency with trillions of new debt. Pretending there is no risk, doesn’t mean there is no risk.

Interests rates across the globe do not reflect reality. Central Bankers and politicians think they can pull levers and control the global economy. They are sadly mistaken. The unintended consequences of their reckless actions will destroy the world. When all the bubbles implode simultaneously, the anger, discontent, disillusionment, and seeking of the culprits will lead to riots, revolution, and ultimately to war.

None of this makes sense, but the consequences of what these bankers have done will be dire. This will not end well.

  •     IRELAND SELLS 10-YEAR BONDS AT RECORD-LOW YIELD OF 1.63%
  •     GERMAN 10-YEAR BUNDS RISE; YIELD FALLS 2 BASIS POINTS TO 0.88%
  •     DUTCH 10-YEAR GOVERNMENT BOND YIELD DROPS TO RECORD-LOW 1.021%
  •     PORTUGUESE 10-YEAR BOND YIELD DROPS TO RECORD-LOW 2.942%
  •     FRENCH 10-YEAR GOVERNMENT BOND YIELDS DROP TO RECORD-LOW 1.214%
  •     U.S. 10-YEAR NOTE YIELD DROPS TO 2.296%, LOWEST SINCE JUNE 2013
  •     SPANISH 10-YEAR BOND YIELD DROPS TO RECORD-LOW 2.038%
  •     FINNISH 10-YEAR YIELD DROPS TO 1% FOR FIRST TIME ON RECORD

10 YEAR TREASURY YIELDS AT 2008 CRISIS LEVELS

The 10 Year Treasury yield this morning is 2.35%. It was 3.04% earlier this year and 4% in 2010. In a healthy growing economy with GDP supposedly exceeding 4%, and real inflation running at 5%, would the 10 Year Treasury be trading at 2008 financial crisis levels? Of course not.

If Obama and his minions, touting our growing economy and millions of “new” jobs one month before the mid-term elections, are telling the truth than why have rates plunged from 3.04% to 2.35% since the beginning of this year? This is while the Fed has been tapering their QE heroine injections. When 10 year rates fall by 23% in nine months it is signaling trouble ahead.

HOW LOW CAN WE GO?


Chart of the Day

For some perspective on all-important long-term interest rates, today’s chart illustrates the 30-year trend of the 10-year Treasury bond yield (thick blue line). As today’s chart illustrates, the 10-year Treasury bond yield has moved within the confines of a 28-year downward sloping trend channel. Since 2008, the trend channel has narrowed slightly (see dashed gray lines). The recent spate of economic concerns (Europe, China, etc.) and geopolitical issues (ISIL, Ukraine, etc.) has encouraged a flight to safety resulting in a decline of the 10-year Treasury bond yield over the past ten months. In fact, the 10-year yield is currently at a level similar to what occurred during the height of the financial crisis in late 2008.