Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

A New Interest Rates Record Is Set... And It Is Foreboding

Interest-Rates / ECB Interest Rates Aug 17, 2014 - 04:22 PM GMT

By: DailyWealth

Interest-Rates

Dr. Steve Sjuggerud writes: A new record was set in Germany yesterday...

The interest rate on a 10-year government bond in Germany fell below 1%.

This number is shocking... Interest rates have never been this low in German history.


What does it mean?

Why would people agree to lend money to a government for 10 years with almost no return on that money?

What is the message that we should take from this?

Aren't things supposed to be getting back to "normal"? And doesn't "normal" mean something like this: By 2020, the Federal Reserve has short-term interest rates at 4%, and 10-year government bonds pay 5%-6% interest?

This type of "return to normal" is the script on Wall Street and on Main Street.

But that script is just plain wrong if 10-year interest rates in Germany are below 1%...

What we're experiencing is the financial storm that nobody is expecting.

I'm talking about DEFLATION – every central banker's biggest fear.

The guy with the right script here is Jim Rickards...

In his excellent book The Death of Money, Jim says, "The world is witnessing a climactic battle between deflation and inflation."

"It is just a matter of time" before this battle comes to a head, he says. At some point, the U.S. economy will experience "an earthquake in the form of either a deeper depression [from deflation] or higher inflation, as one force rapidly and unexpectedly overwhelms the other."

I have always assumed that inflation would be the eventual winner, as governments can print money. But in his book, Jim makes the case that either one could win. With long-term interest rates now below 1% in Europe, it's looking like Europe is already in an epic battle with deflation.

Could it happen here in the States too?

It could.

Legendary bond investor Bill Gross has also recognized that the world is changing before Wall Street and Main Street have. Bill says we have to prepare for "The New Neutral" as he calls it. He expects interest rates in the U.S. will not soar by 2020 as everyone expects. Instead, Bill Gross (also known as The Bond King) sees the interest rates on 10-year government bonds as range-bound between 2.5% and 4.0%.

The message from the German bond market, from Jim Rickards, and from Bill Gross is the same: Long-term interest rates are likely NOT going back to "normal" anytime soon...

Good investing,

Steve

P.S. We still have a few free copies left of Jim's excellent book, The Death of Money. All we ask is that you cover the shipping and handling costs (less than $5). Jim was also kind enough to provide a special bonus chapter, free of charge, just for our readers. Learn more about the book and how to claim your copy right here.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2013 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

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.

Daily Wealth Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in