The global financial system is in dire straits. Resuscitation now looks doubtful.
Debt burdens are at epic proportions on every level - global, national, state and local.
Debt burdens are at epic proportions on every level - global, national, state and local.
one can't ignore the current failures that are the direct result of the 'prosperity boom' that began in the 1980's. This 'prosperity boom' came on the backs of ever-expanding credit and debt
Ireland, Spain, Portugal, Greece and now the seventh largest economy, Italy; all are in trouble. The top five largest economies, including the U.S. are not far behind.
Those in the know realize the collapse is imminent and they are not hiding their opinions. Bernanke and friends essentially told the global market that U.S. growth would be stagnant for several years as the fed planned to keep interest rates low through 'at least' mid-2013.
Maybe the fed said 'at least' because they really can't afford to admit that they agree with the International Monetary Fund's recent assessment that global debt issues would persevere for ten years, or more. Director Christine Lagarde warned of the risk of a 'lost decade' for the global economy unless nations act together to counter threats to growth.
"In our increasingly interconnected world, no country or region can go it alone," Lagarde said in a speech to a forum in Beijing several weeks ago. "There are dark clouds gathering in the global econo
Those in the know realize the collapse is imminent and they are not hiding their opinions. Bernanke and friends essentially told the global market that U.S. growth would be stagnant for several years as the fed planned to keep interest rates low through 'at least' mid-2013.
Maybe the fed said 'at least' because they really can't afford to admit that they agree with the International Monetary Fund's recent assessment that global debt issues would persevere for ten years, or more. Director Christine Lagarde warned of the risk of a 'lost decade' for the global economy unless nations act together to counter threats to growth.
"In our increasingly interconnected world, no country or region can go it alone," Lagarde said in a speech to a forum in Beijing several weeks ago. "There are dark clouds gathering in the global econo
But haven't we already experienced a lost decade?
Just look at the S&P's performance over the past ten years.
And now that the U.S. and other leading economies have exhausted every effort to inject life into the global economy, we are left with bleak GDP growth and inevitable inflation woes.
Yet, with bonds of leading economies becoming ever riskier, the world is still looking to the U.S. for a stable return - or what many on Wall Street call 'the safety trade.'
This could last for several months, if not several years. And with more money piling into U.S. Treasuries, interest rates could push even lower.
Just look at what effect 'the safety trade' has had on U.S. bond prices. Remember that as yields fall, bond prices rise.
Yet, with bonds of leading economies becoming ever riskier, the world is still looking to the U.S. for a stable return - or what many on Wall Street call 'the safety trade.'
This could last for several months, if not several years. And with more money piling into U.S. Treasuries, interest rates could push even lower.
Just look at what effect 'the safety trade' has had on U.S. bond prices. Remember that as yields fall, bond prices rise.
Fortunately for the bond bulls, given all of the world's troubles, 'the safety trade' still looks intact. But, how much longer can rates stay at record lows? Realistically, the reward is now to the downside.
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