Jay Taylor recently put out this article:
“So what’s so bad about this acceleration or blow off of the U.S. Treasury bull market? What’s so bad is that there is a limit as to how high the Fed can push T-Bonds up (rates down). As with all markets when hitting their limit, it reverses course and there is nothing that can be done to stop the reversed trend. And when there is a blow off top, the reversal can be equally as violent. So from what I observe, it seems we are getting very, very close now—perhaps only weeks away—from the end to the most phenomenal bull market in history—that being the highly manipulated bull market for U.S. T-Bonds. And that means interest rates may be about to rise and there won’t be anything the Fed can do to stop that! Imagine interest rates rising in a global economy addicted to trillions of dollars of monetary cocaine that is manufactured from trillions of dollars of debt that cannot be paid!
So here is the way I see things unfolding.
- Based on Michael’s technical work in addition to the concerns voiced on July 1 by Alan Greenspan about an emerging inflation problem, I believe interest rates are getting very close to a reversal that the Fed will not be able to control.
- When rates start to rise, the stock market will start its inevitable bear market and we will start to see a massive escalation of defaults sending panic into the credit markets. It’s very possible what we see this time will be much worse than the 2008-09 episode and there won’t be much if anything central banks can do to stop this run because sovereign risk itself will become impotent.
- The population will demand the Fed “do something” and it will try by printing so much money there is no language to describe it. Question: When you surpass trillions, what is the word used to describe the next group of zeros? But with rates rising even more rapidly now and with business grinding to a halt, there will be loss of confidence in the Fed, and the dollar will be trashed.
- An ounce of gold will remain an ounce of gold. But when measured in worthless dollars it will rise to levels hard to fathom by any person of sane mind at this time.”
Jay reviews a few technical charts of bond yields
in the full original article linked above, (and assumes that zero rates cause a huge tipping point coming very soon) and ends with:
“Although the Fed, Obama, and all in the inner circle of our ruling elite (including Republicans who are suggesting we vote for Hillary over Trump) continue to tell the American people that the U.S. is in good shape, the fact that the Treasury Bills continue to fall to historic lows suggests otherwise. If we had a strong economy, rates would be on the rise. Instead, we are seeing the fear trade take U.S. Treasury rates to increasing heights and in fact, as Michael Oliver points out, we are now approaching a very dangerous “blow-off” phase. It’s a very dangerous phase because as noted above, such blow offs turn suddenly in the opposite direction, just like a ball thrown in the air reverses direction the moment it reaches its zenith.
And, believe me, it is not only a few of us “kooks” who are talking in such cataclysmic terms…”
FWIW, catastrophic economic collapse signs are rampant, and they fit well with the expectations of social collapse, martial law and dictatorship I have been writing about. (I guess I’m one of the “kooks” – but I still say – Don’t count on an election in 2016.