By Graham Summers, MBA
Everyone is applauding the short-term deal to keep the government open for another 45 days.
Well, everyone except the bond market, that is.
The bond market, specifically, the market in U.S. sovereign bonds or Treasuries is the single most important market in the world. Everyone focuses on stocks, because stocks are “exciting” and the best investment for obtaining wealth.
However, the dirty little secret of the investing world is that MOST if not all of the gains from stocks are the result of the bond market. Remember, Treasuries are the bedrock of our current financial system; the yields they pay are the risk free rate of return against which all risk assets (stocks) are priced.
So if bonds blow up, you can kiss the stock market goodbye.
And thanks the the insane amount of spending the Biden administration is engaged in, bonds are about to blow up. Indeed, Bidenomics should really be retitled “debt-o-nomics” because it’s debt, not any kind of economic know-how from the Biden White House that is driving all of this stuff.
Case in point, the U.S. is currently running its largest deficit as a percentage of GDP in history outside of WWII. Bear in mind, this isn’t during a recession. The Biden White House is spending like this while the economy is technically still growing!
Basic economics tells us that the more of something there is, the less value it has. And thanks to the Biden Administration’s spending insanity, the U.S. is issuing a LOT more Treasuries. And that means… you guessed it… Treasuries are being valued as worth less.
Below is a chart you won’t see on CNN or the Mainstream Media. This is a 40+ year chart of the 30-Year U.S. Treasury. If this were a stock, you’d look at this chart and think “GAME OVER.”
As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching. The time to prepare is NOW, before it hits.
I’ve identified a series of market events that unfold before every crash.
I detail them, along with what they’re currently saying about the market today in a Special Investment Report How to Predict a Crash.
Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.
To pick up your copy, swing by:
https://phoenixcapitalmarketing.com/predictcrash.html
Best Regards
