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Inside this special update: Why the bond market is getting whacked and what you should be doing about it IMMEDIATELY …
How do YOU feel about the massive budget deficit that’s hitting the U.S.?
Probably much like overseas investors do, who are now dumping U.S. Treasury notes and bonds in droves!
In just the last 19 trading days, the prices of Treasury notes and bonds have fallen as much as 4 points, sending interest rates surging back to recent highs.
The chief reason: The $1.85 trillion deficit, the worst decline in tax revenues since the Great Depression, and an avalanche of new Treasury issues hitting our bond markets. The Treasury Department just announced that it will auction a record $75 billion in notes and bonds next week, and much more is on the immediate horizon!
We’ve been warning you of the coming crisis in our bond markets, and now it’s happening.
How much higher could interest rates go?
How will the giant U.S. deficit impact the U.S. dollar, already on its knees and just a fraction away from record new lows?
How will it impact gold? Oil?
Will foreign markets, which are NOT burdened by huge deficits, continue to benefit from an influx of international capital?
What should you be doing now?
First, and foremost, if you haven’t already done so, do not — I repeat, do NOT — touch long-term bonds with a 10-foot pole.
Second, be absolutely sure to attend our upcoming First-Ever Weiss Global Forum, an international online video conference that Martin will host bringing together our top experts.
Our mission: To explore with you a wide range of new global profit opportunities (and pitfalls) for the balance of 2009 and beyond.
It will be a monumental 1-hour video event — all with no commercial interruptions or promotions of any kind.
It is absolutely free with no strings attached — our gift to make sure you get candid, unhedged answers to the most crucial questions you have about your investments right now.
We do ask, however that you register so we can make sure you receive your instructions for attending prior to the briefing.
Just click this link. We’ll reserve your place for you, and Martin will immediately send you an email with your login instructions.
Plus, after you register, click here and leave a comment to let me know how you feel about the budget deficit and how Washington is spending our money!
Best wishes,
Larry
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- Final registration for our commercial-free, first-ever online Weiss Global Forum ends in just 36 HOURS! (08/11/09)
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{ 8 comments… read them below or add one }
Can you please let me know what you mean by ‘long term bonds’? I need to invest some money as I live on the interest. A bank here in UK has suggested a Corporate Bond Fund which is administered
by Fidelity. There is no long term involved - although they suggest it is left for a period of 5 years to get maximum benefit from it. What do you think? Appreciate a reply sooner than later. Many thanks.
Amita Southgate
Larry Edelson Reply:
August 11th, 2009 at 6:01 pm
Any maturities of greater than 3 years, in my opinion, are risky. The longer the term, the greater the risk.
Hello Mr. Edelson,
Just read some of your recent columns for the first time and I was very impressed by the sophisticated yet practical outlook and advice.
Regarding the Federal deficit, obviously it’s growing out of control. But on the other hand, is 2009 really the best year to slash it in a major way (if we pretend that’s even a political option)? Just as it looks like we “might” have dodged a 2nd Great Depression? And isn’t it one of the few things that Economists mostly agree on, that the only way to break out of a catastrophic downward demand spiral in the short run IS in fact to allow very significant deficit spending by the national government. And we’ve got just the team in place for that policy I’m afraid ;-).
Of course, it would have been really nice if we had not already piled up massive deficits during the “good” years of 2004-2007. And if we had managed to hang on to some of the fragile federal surplus of 1999-2000 (or was that a dream?). Instead, we allowed GwB to blow about a Trillion+ borrowed dollars on a pointless and even counter-productive war of choice.
Larry Edelson Reply:
August 12th, 2009 at 1:52 pm
Agreed!
Excellent presentations by all concerned. Thank you. I am very concerned about the stability of the dollar and expected inflationary economy. I am of the opinion that government should stay out of the economy and if companies are failing because of poor decisions and management, they should go under. If there is a legitimate demand for a service or product, there will be someone to come along and supply what is needed. There is no one presently in government service who is capable of running a profit-making enterprise. Look at what they have done. I am an 84 year-old veteran of three wars who fears for his children and grandchildren. I have no faith in our current crop of politicians.
Larry Edelson Reply:
August 28th, 2009 at 12:53 pm
Can’t say I disagree. Thanks!
I think that Oboma is really tryin gto help the American People. HE is just having to fight the Violence of the Republicans, Mob tactics. But helping the American People is somethig that the Republican Party never did even try to do. With them it was only to line theri own pockets. And try to keep thir feet on the American people, and most assuridaly the American workers. The reason they try to keep down Unions. People are at least beginning to see them for what they are. and doing, even some republicans.
I’d love to see interest rates rise and rise a lot. Perhaps we can get better returns on our savings accounts. Retirees are suffering right now. Interest income down and no increases in social security next year.
Thanks.
Hi - for a fixed income investor, is there a relatively safe, responsible country offering decent interest rates on government bonds? If so, how does one go about investing into?
Good for people/ who understand / Bad for U.S. of A./ and those who belive the lies the gov. is telling!!!!!!!!!!!!
I see 2 potential catastrophic moves as a result of our government spending.
1. dollar collapses and everyone sell our treasuries and we try to paste tings together on the backs of the Canadian resources and the Mexican labor with the pseudo silver backed AMERO (NAFTA currency) and if that cant hold water globally the #2.
2. The IMF manipulates the SDR daily. by .1 % . 1 USD= .6380050000 (10 dec places!!!)
If you take the value of the USA (assume- lowball) = Outstanding treasuries or 3.293 X 10 to the 12th power, now that .1% = 3.29 billion dollars. With gold and foriegn currencies going opposite it give the IMF a huge advantage , first hand, insider info to buy gold , and this is dialy.
When gold reaches Zimbabwae porpotions then the world goes onto the gold satandard of the IMF (falling over themselves). Now the IMF controlles America.
Historically our beloved government has manipulates and confincated gold, Isn’t there another commodity of save haven?
Frank