As Good as it Gets, by Robert Gore

Posted by straightlinelogic 10 months ago to Government
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Stock market and cryptocurrency pyrotechnics have obscured an incipient bear trend in a much more important market, bonds, which in the US apparently topped out in July 2016. Falling bond prices mean rising interest rates. The world has never been more indebted; a global bear market in bonds would be toxic to equity markets and economies (and perhaps cryptocurrencies). Tellingly, high yield bond prices are diverging from rising stock prices, indicating increasing credit stress. According to David Stockman, tax reform will increase the government’s borrowing to $1.25 trillion in fiscal year 2019. Rising rates would add more to the government’s interest bill, and hit indebted businesses and individuals as well. They would offer relief to savers long abused by the Fed’s interest rate suppression tactics, but savers are a much smaller group than borrowers, and they spend less.

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  • Posted by  $  jbrenner 10 months ago
    You are correct in that the stock market will eventually take a dive, but ...
    1) The economy was so long depressed by President Zero that pent-up demand for economic success will take quite a while to exhaust;
    2) The reduction in corporate taxes will bring back entrepreneurs to the US; and,
    3) One of the overarching themes of Atlas Shrugged is the looters' effectiveness at prolonging the inevitable collapse.

    Predicting timing on economic collapses is a very challenging business. Many economists have gone broke trying to anticipate the inevitable. I am going to continue to be financially in the game, as I have since Trump's election, for at least a while. Market timing is not nearly as difficult as the financial gurus try to convince us. If and when it becomes obvious that the looters will resume their dominance, then it is time to shrug again.
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