The Next Collapse: Signaled by the Bond Market

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Something is going on in the global bond market and it doesn’t look good for most of the other markets. In the US Treasury market, yields have broken above resistance levels not seen since 2014 respectively and we’re seeing similar moves in the global sovereign bond markets.
There are many reasons interest rates matter, today we’re going to look at three of those reasons.
First is the debt that was taken on with interest rates near zero that now has to be rolled over at higher rates.

Secondly central bankers knew that if bond interest income was taken away from savers, they would take on more risk in a reach for yield. Particularly if stock dividends were paying more than bonds, thus we have the most expensive stock market in history.
In February, that seems to be changing. As interest rates are hitting levels not seen since 2014 and earlier, global stock markets are falling.

Which takes us to the third topic, all those opaque derivatives bets which dwarf all markets combined. From the most current OCC report on derivatives in the FDIC banking system, we can see that banks are leveraged 24.7 to 1, derivative bets to assets. Keep in mind that bank “assets” include your deposits, brokerage accts. etc. and the bail-in laws are in place.
As a reminder (think Cyprus 2013 and Greece 2015) when a bank becomes insolvent they have the right to halt or control withdrawals. In Cyprus, capital controls were in place for roughly 2 years and in Greece, they are still in place.

The real reason central bankers are attempting to raise interest rates at this time is to have the ability to lower them when the next crisis hits. In the US, going back to the early 1980’s, interest rates were lowered to “stimulate” the economy an average of 6.5%., so when the next crisis happens, central banks are most likely to plunge us into negative rates. Nor does their balance sheet have enough room to take on more debt to mask this next crisis. Debt fiat system over.
So what can you do? Be prepared to be as independent as possible, so my mantra; food, water, energy, security, community, barterability and wealth preservation.

History proves that physical gold and silver in your possession protects wealth and positions opportunities better than any other asset. That’s why those that understand money own gold and silver.

For more information on protecting your long term wealth, contact us at:
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Email: services@itmtrading.com

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Comments

Kent Lawson says:

You're terrific Lynette! You explain it in the simplest terms where anyone can understand it! Thanks so much!

Saeed Hoque says:

Thank you for that beautiful explanation

Terri says:

Bitchin video!!

Terri says:

Ms.Lynette is BOMB!!! I love listening to her……Thank you !!!

Xx Xx says:

Next financial crisis is underway.. .the goal is to let the common people believe there is not so the big boys can get out and leave us holding bag like last time…..not me. I'm all out as of 2 weeks ago when t bill alarm flashed red.

No Censorship says:

Enjoy at 1:5 speed

Lauris Korolov says:

OK, lets keep it real…..wishfull thinking as of now. In 2nd quarter 2016 i invested 20k in silver, now it is worth 19k. At the same time i invested 1.5k in bitcoin and even in this correction it is worth 45k. Month ago my cryptos were worth 95k. I only invested what i could aford to lose in bitcoin. Open up people….do not be grampa and granma.

William Goode says:

Lynnette

No one explains the topic better than you.

Many Thanks

Jim Mathers says:

Lynette, How can we utilize logic in a now totally illogical manipulated market. This includes regulators who are paid to look the other way, a criminal Fed backing criminal banks and skirting all the rules. These charts are convincing but they too have been manipulated meaning they are not real. We are all waiting for this crash that in my mind now could be stretched out for a long time depending on the overall agenda of those pulling the strings. At this point, I think there are many unknowns and a lot of guesswork for us all. The public will suffer no matter what in the end.

Derelect5 says:

The counter trend to increasingly perceived digital market fraud will be legitimate digital markets and money powered by the very same digital technology used fraudulently by the bankers; but with built in immutable decentralized legitimacy. This is the yin and yang in our unique age of digital markets and money. The metals cannot bring legitimacy until they are priced under a tokenized market. History does not repeat…..It rhymes as it respects the unique properties of the times.

Derelect5 says:

You need not use up anything in the virtual world of digital money and markets. Everything in the banker's digital domain can be perpetually controlled, to include the price of the metals. I predict a soon to be miraculous recovery in bonds and stocks as the bankers go to the government to sanction deeper levels of covert and fraudulent digital control. Your neighbor will be knocking on your door to buy your gold before you see the digital price on your computer screen go higher.

Spook Griffith says:

You're awesome, cold hard fact of life,, can't help but love you.

Teamhunley says:

I've never regretted a gold purchase

jim h says:

First of all when rates go up or down these has nothing to do with the principal as it stays the same. When I receive interest payments from treasury this also does not effect principal. To make it simple as it obvious many commenters have no experience in trading the markets not goes she. If I buy a 6 month bill which has a face value of $1000 and ratea rise. I would simply hold to maturity and roll it over for a higher yield. What is rolled over? The $1000 face value.
Now why are rates rising? Investors are demanding higher rates at the 3 auctions held weekly by treasury. Who buys most of the bonds on the secondary market whether rated rise or fall? Central banks. Central banks do not like to hold large amounts of foreign currencies as these pay no interest and are forced to buy treasuries as this is the second most liquid market on the planet behind treasuries and are always in great demand no matter what you read in the alt media. China is at least 10 years away from having a liquid and large enough bond market to compete with treasuries. Europe has no federalized bond market backed by all EU countries. Folks this leaves treasuries as the only game in town. What else you going to buy? Italian or Spanish sovereign debt? Not a chance in hell!
US equities have not been propped up by central banks but the capital flight out of Europe since 2011. Back in 2009 Armstrong Economics forecast that the Dow would head to 22,000 then 23,000 and eventually to around 40,000 all due to capital flight out of Europe. The first two targets have been hit. 2018 is 25,000 to around 28,000 and this first target has already been hit. The worst for the Dow is a normal correction at a maximum 8% before moving higher. It is no accident that the Swiss central bank shortly after the forecasts started to buy US equities and now is the most profitable central bank on the planet. Norway's northern wealth fund also.started buying then and has the largest net worth on any sovereign fund at over $1 trillion. Folks do you really think this was all an accident and they clearly are clients of Armstrong Economics. Folks this is the "smart money"
Now for derivatives. There are two types. One is OTC or unlisted derivatives and the other are physical or listed derivatives that trade on regulated exchange. The total notional value included both and many of the physical derivatives are used to hedge the OTC derivatives. If I am a bank and entity needs to hedge for some reason I would underwrite and sell a derivative. Most hedges expire worthless as they are only for a specific time frame. Statically these sold are in my favor of expiring worthless. These have been a huge income stream for the banks.
Now the last 11 years there has been surpluses in the above ground supply. The last 3 years has been record of this supply and now currently at 2.5 billion ozs. Before the previous 11 years there were deficits for 10 years and the above ground supply never went under 1 billion ozs. Folks you are delusional if you think silver is going to take off in value. It won't and can't as industry, manufacturing and retail jewelry all need low prices. These factors above has been silver's achilles heal.

Mike Peacock says:

Great video. May be cut back on the "quotes" thing you do. 🙂

joseph Freeman says:

Awsome Video Thank You Lynnette Zang.

Hariadi Setjo says:

Prophet Muhammad always used Gold & Silver. Prophet Muhammad also did not allow any type of interest / usury. Prophet Muhammad also refused to manipulate the price even when people complained to him.

Hariadi Setjo says:

I cannot (don't wanna) wait until next week. Amazing update! I feel so ecstatic, we are entering a new major phase in our life!

Alfian Abdul Halin says:

Hi Lynette. I’m from an IT bground but interested to learn about economics. I hear u always mention rates going up and down. Which rate is that actually? As I’ve come to learn, there are many types of rates. There’s housing loan rates, savings rates, overnight lending rates etc. But when experts mention rate hikes, which one are they referring to? Sometimes the discussion is also related to bond yield (which seems to be a type of rate as well, I think…). Maybe what I’m asking is, which rates should we pay attention to? Thanks 🙂

Guadalupe Carazo says:

Terrific presentation.   Thank you for keeping us informed.

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