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As we have been warning repeatedly over the last few months, the Powell
Fed is totally unlike the Bernanke or Yellen Feds.
Former Fed Chairs Ben Bernanke and Janet Yellen were “married” to the bull
market in stocks. Indeed, from 2009 to 2016 it became a running joke that the
moment the stock market began to break down, Bernanke or Yellen would issue a
statement that the Fed was “ready to act” or some other accommodative phrase.
Stocks would erupt higher. And the bull market remained intact.
Not current Fed Chair Jerome Powell. Powell has made it clear he is going
to hike rates until “something breaks.” And he doesn’t meant a minor stock
market correction; he explicitly stated that stocks would have to enter a
prolonged collapse similar to that of 2008 for him to change the Fed’s
monetary policy.
Well, he’s going to get what he asked for.
The US Bond Bubble, which I call “the Everything Bubble” is
beginning to blow up.
As we noted previously, the yield on the all-important 10-Year US Treasury
has broken its multi-decade downtrend (red line). That was bad enough… but
now yields have risen above CRITICAL resistance (blue line).
THIS was the proverbial “line in the sand”… the line which yields needed
to NOT break. And they just did.
This move is not exclusive to the 10-Year Treasury either. The 30-Year
Treasury has ALSO broken its restively downtrend (red line) and CRITICAL
resistance (blue line).
This is a MASSIVE warning to everyone. If you wanted a comparable
situation… this is the equivalent of when subprime mortgages started blowing
up before the last crisis.
The only difference is that bubble in mortgages/ real estate was a bubble
in a relatively senior asset class. The bubble in sovereign bonds is a bubble
in THE MOST senior asset class… the bedrock of the entire global financial
system.
Did the next crisis just start? We are about to find out!
If you are not already taking steps to prepare for this, we offer a FREE
investment report outlining when the bubble will burst as well as what
investments will pay out massive returns to investors when this happens. It’s
called The Biggest Bubble of All Time (and three
investment strategies to profit from it).
We made 100 copies to the general public.
As I write this there are only a handful left.
To pick up your FREE copy…
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