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Trading Lessons

The Most Important Bond In the World Just Broke a 25 Year Downtrend

Interest-Rates / US Bonds Jan 31, 2018 - 04:24 PM GMT

By: Graham_Summers

Interest-Rates

The single most important bond in the world is the US 10-Year Treasury bond.

According to modern financial theory, this bond, with a duration that is meant to cover a full economic cycle, is generally considered the “risk free” rate of the return for the entire financial system.


Corporate debt, mortgage rates, auto loans, even stock dividends are all perceived in terms of their value/risk relative to the yield on the 10-Year US Treasury bond.

With that in mind, the yield on this bond has just broken above the trendline that has guided it lower for the last 25 years.

Put another way, for the first time in over 25 years, the bond market is at real risk of moving into a bear-market.

Why does this matter?

Bonds trade based on inflation.

If inflation rises, so do bond yields.

When bond yields RISE as they are right now, bond prices FALL.

And when bond prices FALL, the massive debt bubble begins to burst.

Globally the world has added over $60 trillion in debt since 2009… and all of this was based on the assumption that bond yields were going LOWER not HIGHER

All of this is at risk of blowing up as rates continue to rise. The time to prepare for this is NOW before things blow up.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s in terms of Fed Policy when The Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Graham Summers

Phoenix Capital Research

http://www.phoenixcapitalmarketing.com

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and unde74rvalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

© 2018 Copyright Graham Summers - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Graham Summers Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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