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Bonds & Interest Rates

Prepare For Interest Rate Rises And Global Debt Bubble Collapse

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Posted by GoldCore

on Monday, 13 November 2017 06:12

– Diversify, rebalance investments and prepare for interest rate rises
– UK launches inquiry into household finances as £200bn debt pile looms
– Centuries of data forewarn of rapid reversal from ultra low interest rates
– 700-year average real interest rate is 4.78% (must see chart)
– Massive global debt bubble – over $217 trillion (see table)
– Global debt levels are building up to a gigantic tidal wave
– Move to safe haven higher ground from coming tidal wave

Editor: Mark O’Byrne

risk-free-rate-1

Source: Bloomberg

Last week, the Bank of England opted to increase interest rates for the first time in a decade. Since then alerts have been coming thick and fast for Britons warning them to prepare for some tough financial times ahead.

The UK government has launched an inquiry into household debt levels amid concerns of the impact of the Bank of England’s decision to raise rates. The tiny 0.25% rise means households on variable interest rate mortgages are expected to face about £1.8bn in additional interest payments whilst £465m more will be owed on the likes of credit cards, car loans and overdrafts.

The 0.25% rise is arguably not much given it comes against backdrop of record low rates and will have virtually no impact on any other rate. However it comes at a time of high domestic debt levels, no real wage growth and a global debt level of over $217 trillion.

....continue reading HERE



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Bonds & Interest Rates

Bond Bears And Why Rates Won't Rise

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Posted by Lance Roberts via Seeking Alpha

on Friday, 10 November 2017 06:52

saupload Rates-10-2-Yield-Spread-110817

Here we go again…

Since June of 2013, I have been writing about the reasons why rates can’t rise much and why calls for the end of the “bond bull market” remain wrong.

Regardless, about every 3 months or so, there is a tick up in rates and you can almost bet that soon thereafter will be a litany of articles explaining why THIS time the “bond bull market” is really dead. For example, just from this past week:

 

 

What is the argument from low rates will rise?

It basically boils down to simply this – rates are so low they MUST go up.

The problem, however....

.....continue reading HERE

 

...also from Seeking Alpha:

Energy Stocks - Relative Performance Breakout Watch



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Bonds & Interest Rates

10YR Treasury Note & Its Yield

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Posted by NFTRH

on Wednesday, 08 November 2017 06:44

I am staying patient on this not only because the daily charts have not completely given up the rising yields play, but also because the monthly charts still look poised for it (and a decline in bonds).

The post-FOMC period has been somewhat annoying as often seems to be the case. I’ve been trying my best to be balanced until the view clears as the robots running this market grind their gears. It’s one of those phases I wish I were a day trader not at all caring what the macro signals are. But alas…

Here we have the T note having inched out of a bear flag and the yield having inched up from a bull flag. These are being tested now.

ust

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Bonds & Interest Rates

The Fed: End of an Era

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Posted by Doug Noland

on Monday, 06 November 2017 06:29

171031131148-video-card-jerome-powell-1024x576"The Federal Reserve is soon under the command of a conventional and non-ideological individual with a distinguished career in the public and private sectors."

Of the diverse strains of inflation, asset inflation is by far the most dangerous. A bout of consumer price inflation would be generally recognized as problematic and rectified through a tightening of monetary conditions. On the other hand, asset price inflation is both celebrated and venerated. There is simply no constituency calling for a tightening of conditions to ward off the deleterious effects of rising asset prices, Bubbles and attendant economic maladjustment. And as we've witnessed, the bigger the Bubble the more powerful the constituencies that rationalize, justify and promote Bubble excess.

About one year ago, I was expecting a securities markets sell-off in the event of an unexpected Donald Trump win. A Trump presidency would create disruption, upheaval and major uncertainties - political, geopolitical, economic and social. Instead of a fall, the markets experienced a short squeeze and unwind of hedges. Over-liquefied markets and a powerful inflationary bias throughout global securities markets won the day - and the winning runs unabated.

We've come a long way since 1992 and James Carville's "I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody." New age central banking has pacified bond markets and eradicated the vigilantes. These days it's the great equities bull market as all-powerful intimidator.



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Bonds & Interest Rates

Bond Yields: Testing Time & The Big Macro Play Ahead

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Posted by NFTRH

on Tuesday, 31 October 2017 06:20

The breakouts above resistance are now being tested in 10 & 30 year bond yields. Though it’s broken through the zone I drew, the 10yr is still regarded as testing.

tnx5

The 30yr is looking more iffy, but these are the financial markets and they are under no obligation to give us nice, clean parameters. Still, below the SMA 200 this one can be considered under threat.



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The end of the longest bull market?

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