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Bonds & Interest Rates

Hillary: Deceit, Debt, Delusions Part Two

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Posted by The Burning Platform

on Thursday, 13 October 2016 06:25

In Part One of this article I addressed the deceit of Hillary Clinton and politicians of all stripes as they promise goodies they can never pay for, in order to buy votes and expand their power and control over our lives.

I created the chart below for an article I wrote in 2011 when the national debt stood at $14.8 trillion, with my projection of its growth over the next eight years. I predicted the national debt would reach $20 trillion in 2016 and was ridiculed by arrogant Keynesians who guaranteed their “stimulus” (aka pork) would supercharge the economy and result in huge tax inflows and drastically reduced deficits. As of today, the national debt stands at $19.7 trillion and is poised to reach $20 trillion by the time “The Hope & Change Savior” leaves office on January 20, 2017. I guess I wasn’t really a crazed pessimist after all. I guarantee the debt will reach $25 trillion by the end of the next presidential term, unless the Ponzi scheme collapses into financial depression and World War 3 (a strong probability).

US-National-Debt-1980-2019-Chart

....continue reading HERE

....read part One HERE



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Bonds & Interest Rates

Is The Fed Delaying The Day Of Reckoning?

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Posted by Chris Vermeulen - AlgoTrades Systems

on Wednesday, 12 October 2016 14:15

There Is No Economic Recovery!

The FED and the Corporate World understand that there is NO economic recovery. They need to keep feeding this 'bull market' with plenty of accommodative easing or this 'bull' will die. The FED will do whatever it takes to maintain this by cutting rates to near zero and below so asto spruce up the economy. However, these conventional policies that are being applied, by the FED, will not work seeing as the 'deflationary forces' have gained momentum. Global economies cannot sustain rate hikes. They will continue to use 'expansionary monetary policy', indefinitely: (https://finance.yahoo.com/news/trump-says-fed-chief-yellen-114816250.html).

The FED will no longer remain the 'lone wolf' Central Bank of and by keeping interest rates from going negative. The New Zealand Central Bank went through this same cycle, last year, at which time the economy could not sustain a rate hike, thus resulting in a quick cycle of rate cuts.

The 'herd mentality' is now at the stage where they must accept this as the 'new norm'. They want to keep this illusion alive and do not want to deal with the reality.

When the FED does implement negative interest rates, the stock markets are going to soar so high that it will probably even shock the 'bulls'. Thus, this is the reasoning that the market will not currently crash, but will experience sharp corrections. In this current market environment, I now recommend putting your money into precious metals.

This is one of the most detested 'bull markets' in history. The FED has provided this market with the ingredients that it needs to take it to the 'bubble level'. The masses will embrace this market in the same manner as the corporate world has done so for the past eight years.

The main trigger for the financial crisis of 2008 was the issuance of mortgages that did not require down payments. The ease at which one could get mortgages, in the past, is what drove housing prices into unsustainable levels.

Currently, Barclays has launched the "Family Springboard Mortgage" which allows homebuyers the opportunity to purchase a property with a mere 5% deposit.  In order to acquire this 5% deal, one will need guarantors to put up the cash, which, in turn, will be lost if one fails to repay the mortgage.

Ones' family/guarantor must place savings which are equal to 10% of the purchase price into a Barclays Helpful Start savings account. No withdrawals are allowed for three years. The Helpful Start savings account pays the Bank of England's' base rate plus 1.5%, which currently means getting 2% interest, before taxes. This is not a lot of interest considering the lengthy period of time: (http://www.barclays.co.uk/mortgages/family-springboard-mortgage).

When the FED starts purchasing private assets, this will negatively impact economic growth and consumers' well-being. This reasoning is that the FED will use this power to keep failing companies alive and thus preventing the companies' assets from being used to produce goods or services which are more highly valued by consumers.

The Reality:

Over 50% of Americans do not have enough money to invest in stocks. The U.S., unfortunately, is currently appearing to be closer to that of a third world nation. Americans appear to be living hand to mouth thus making it more and more difficult for the average person to focus on his/her financial security. One in every seven Americans currently depend on food stamps in addition to using Food Banks, despite this 'so-called economic recovery'.

The chart below from Banktrate.com illustrates that a total of 74% of individuals either do not have enough money to invest in the stock market or they do not know anything about stocks.

42749

Random tests have already shown that the monkeys with darts fare better than most of these experts would.



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Bonds & Interest Rates

World Gone Mad, Part 1: “Huge Demand” To Lend Italy Money For 50 Years

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Posted by John Rubino - DollarCollapse.comom

on Wednesday, 05 October 2016 09:21

Screen Shot 2016-10-05 at 9.16.28 AMYou read that right. Not only is Italy selling 50-year bonds, but people are lining up buy them. 

Italy’s first 50-year bond sale had huge demand 

(Reuters) – Italy sold its first 50-year bond on Tuesday as some investors bet the European Central Bank may soon add ultra-long debt to its asset-purchase stimulus scheme.

About 16.5 billion euros of orders were placed for the bond – 5-1/2 times the expected sale amount, despite concerns over Italy’s banks and an upcoming referendum that could unseat its prime minister.

Many of the fund managers who lend to Italy – and those who have already bought 50-year bonds from France, Belgium and Spain this year – may not live to see it paid back. Those who signed up to Ireland’s 100-year bond in March almost certainly won’t.

But they could make quick gains if the ECB extends the maturity limit on its bond-buying scheme later this year, in an attempt to prolong its 1.7 trillion euro programme.

Analysts say such a move could be among tweaks expected in December to allow the central bank to continue quantitative easing beyond its scheduled end in March 2017.

“It is one of the least sensitive options from a political, technical and legal perspective,” said Frederik Ducrozet, senior European economist at Swiss wealth manager Pictet.



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Bonds & Interest Rates

BOJ, FOMC and Where to Now?

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Posted by Gary Tanashian - NFTRH

on Monday, 26 September 2016 08:48

The Bank of Japan gave us a glimpse as to just how far down the rabbit hole we may have to follow global policy makers as we try to make sense of ever more complex and shall we say, innovative ‘tools’ being used in the effort to engineer individual economies and asset markets within the global financial system. BoJ announced it would conduct “JGB purchase operations” in order to “prevent the yield curve from deviating substantially from the current levels”.

The market initially interpreted this to mean BoJ stood in support of a rising yield curve, which would for example, help the banks (ref. MTU and SMFG, which exploded higher off of the support levels we had projected), but by the end of the week the Japanese Yield Curve had eased substantially and there seemed to be confusion about what the policy’s intent, or would-be effects, actually were. I wonder if the BoJ even fully knows what it is doing now. Lots of moving parts in a complex system.

As for the FOMC, it was non-business as usual. For all the pomp and bluster of the August-September Jawbone blitzkrieg we’ve been subjected to, the damn committee simply rolled over again, admonishing through hints that they really, really mean it when they imply a rate hike is still coming in 2016. But for now and to the surprise of very few, they did what they have done for the last 8 years; obfuscate and delay.

This time we even saw renowned dove Eric Rosengren rightly (in my opinion) shifting to the hawk side of the table as he observes a landscape of cranes to nowhere in Boston and extrapolates… ‘hmmm, I think we are blowing an asset bubble’. Yet still, the committee chaired by Janet Yellen – she of the hawk-tinged Jackson Hole Jawbone (with handy QE “tools” in her back pocket) went on to vote NO HIKE despite elevating CPI and soaring real estate, healthcare and services costs. Also, let’s not forget the ‘near all-time highs’ stock market, which unsurprisingly got an across the board price surge in response.

Where to now? Speaking as a lowly participant, I gave my stance in Friday’s in-day market update (profit retention). As you will see in this week’s report, weekly US stock market charts remain just fine, as we have noted for months now. But the daily charts of NDX and SPX used in the update gave some parameters to shorter-term correction potentials. What’s more, the global macro is a confusing mess. Japan took confusion to a new level last week, but the US is also a Wonderland of its own, post-2008.

2yr-ffr-spx



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Bonds & Interest Rates

Legend Responds To Fed Decision And Issues Dire Warning About Why The World Financial System Is Headed For Total Collapse

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Posted by King World News

on Thursday, 22 September 2016 07:44

King-World-News-Legend-Responds-To-Fed-Decision-And-Issues-Dire-Warning-About-Why-The-World-Financial-System-Is-Headed-For-Total-Collapse-864x400 cOn the heels of the Fed’s decision not to raise rates, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events on why the world financial system is headed for total collapse.  

Egon von Greyerz:  “It was no surprise to me that the Fed did not raise rates today...

....continue reading HERE

...related from Martin Armstrong:

Is the World Political Economy Melting Down?



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