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So it Begins: The Bond Crash Looks to be Here, and Investors Are Panicking

Wednesday, June 10, 2015 13:59
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(Before It's News)

dollar-tsunami

By: Voice of Reason

FOR MORE NEWS BY VOICE OF REASON CLICK HERE!

www.thelastgreatstand.com

 

UNLESS YOU’VE BEEN LIVING UNDER A ROCK… 

YOU PROBABLY KNOW A FINANCIAL TSUNAMI IS HEADED RIGHT FOR US… 

I find it hard to believe how many people are in denial that a financial storm of biblical proportions is coming. I don’t profess to be the brightest bulb on the tree at all times, but I have no formal economic training, and I PREDICTED MUCH OF WHAT WE ARE SEEING NOW, AND ABOUT TO SEE OVER TWO YEARS AGO. Oddly, I did the same thing in 2004 when I had the housing crash of 2008 pegged almost to the day. I dunno. This stuff isn’t that hard to figure out with a pad, pen, and even a hint of common sense. Part of having common sense, is knowing to IGNORE everything the talking heads on TV are saying or what you read in the mainstream media. Do you realize in the 80’s there were 50 major media companies? Today, only SIX remain. EVERYTHING comes from those same SIX companies, and FIVE out SIX are ultra liberal funny farms. 

For all those that HAVE been under a rock, my guess is you had TV down there right? Uh, have you not noticed every other commercial is talking about buying Gold to hedge the impending IMPLOSION? Wow, Let me know how that blissful ignorance works out for you and your families. There are links at the bottom of this post detailing everything you could want to know about the how and why behind the coming crash. Perhaps I should say coming apocalypse because it would be more accurate. This is not going to be an “economic downturn.” This is going to be a global DEPRESSION worse than our civilization has ever seen. Read the links below. It’s so black and white it’s scary. Much like 2008, we’ll be the catalyst that drags the world down with us, only this time we won’t get out of it…. not in my lifetime anyway. Do your homework, and there is PLENTY of precedent for what I am saying. We have become so fat and stupid in America, and thanks to liberals re-writing history, no one actually knows the REAL history… so we are doomed to repeat the mistakes we easily could have avoided. 

 

THAT TIME IS LONG GONE!

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It’s time to pay the piper. This crash is going to finally put an end to the Dollar as the World Reserve Currency. Having the world Reserve Currency has given America special privileges and ENORMOUS power over the years… power we abused. Our status has allowed us to borrow money at rates a fraction of our “ALLIES.” With everything being denominated in U.S. Dollars, it gave the United States control in everyone else’s financial affairs. It appears everyone else got tired of it. Furthermore, whenever trouble has struck, America has just started up the printing press. Since taking office, Obama has printed approximately $85 BILLION PER MONTH OUT OF THIN AIR. By joining China’s new bank discussed below, our “ALLIES,” and the rest of the world, have sent a CLEAR message to America: 

 

YOU ARE BROKE, AND YOU ARE OBSOLETE!

In my post titled, DEATHBLOW TO THE DOLLAR – EVEN OUR “ALLIES” ARE ABANDONING US, the The Trumpet writes: The blows to America’s economic might are descending rapidly and forcibly. Brace yourself: A new economic age is about to begin.” The infrastructure is being built for a world without the United States. China’s new long-awaited international payment system could go live as early as September or October. The new payment system will allow nations and companies to conduct transactions outside America’s control. Furthermore, America’s financial house will be in such disarray, some have said WITHIN ONE YEAR OF THE ECONOMIC CRASH, 9 OUT OF 10 AMERICANS WILL BE DEAD. 

 

A NEW DAY IN AMERICA IS ALMOST HERE… 

BRACE YOURSELVES…

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THE WORLD IS ENTERING A NEW ECONOMIC ERA – ONE THAT WON’T BE DEFINED BY AMERICA!

This past March marked a radical turning point for the global economy, particularly the United States’ economic dominance.

China proposed the launch of the Asian Infrastructure Investment Bank (aiib)—a new, Chinese-run international bank specifically designed to challenge U.S. global economic leadership. America tried to convince other nations not to agree to join. But it failed—even with its closest allies.

 

FOR THE U.S., IT WAS AN UNMITIGATED DISASTER!

It should be a “wake-up call,” to a “new economic era,” wrote former Treasury Secretary Larry Summers.

The world essentially closed ranks and turned its back on America.

“The battle of wills between Beijing and Washington over a China-sponsored development bank for Asia is turning into a rout,” wrote the Washington Times. “[T]he Obama administration has found itself isolated and embarrassed as its top allies lined up this week to join the proposed Asian Infrastructure Investment Bank” (March 18).

SADLY, IT WAS OUT MOST IMPORTANT ALLY THAT LED THE DEFECTION…

A RESULT OF HOW OBAMA HAS TREATED ALLIES? 

NAH… OF COURSE NOT!

YOU KNOW WHAT IS REALLY SCARY? NO ONE DARES BRING UP THE PINK ELEPHANT…

I don’t think its a stretch to say most Americans have heard ad nausium if Greece goes, so does the European Union – hence all the bailouts to try to save Greece. Just LOOK at all the chaos it has caused Europe. Now for some facts:

I don’t know how many countries make up the whole European Union but I know as a whole they have a $16 TRILLION dollar economy. Greece makes up 2% of their GDP. Hmmmm. If a measly 2% has the potential to bring down an entire continent’s financial system, lets compare that to the United States.

The United States has a $15 TRILLION dollar economy. Anyone care to venture a guess what percentage our “liberal bastions of insanity” here in the U.S. make up as a percentage of our GDP? Of course I am referring to New York, New Jersey, Illinois, California, & Massachusetts. I don’t know what the percentage is, but can we agree its higher than the 2% Greece is? Why is no one talking about this? I think we could say ULTRA conservatively those states make up 15% of our GDP. Sadly, the insane union pensions make up hundreds of billions of dollars in unfunded liabilities coming due. How do you suppose we’ll get out of that one? Don’t even say China. If 2% Greece can bring down Europe, imagine what happens WHEN, not IF those states go belly up. WOW. 

EARTH TO LIBERALS: 

SOONER OR LATER YOU ALWAYS RUN OUT OF OTHER PEOPLE’S MONEY!

[Audio/Video below cannot be seen in Newsletter – have to go to Blog]

FOR MORE NEWS BY VOICE OF REASON CLICK HERE!

Is the financial collapse that so many are expecting in the second half of 2015 already starting?  Many have believed that we would see bonds crash before the stock market crashes, and that is precisely what is happening right now.  Since mid-April, the yield on 10 year German bonds has shot up from 0.05 percent to 0.89 percent.  But much of that jump has come this week.  Just a couple of days ago, the yield on 10 year German bonds was sitting at just 0.54 percent.  And it isn’t just Germany – bond yields are going crazy all over Europe.  So far, it is being estimated that global investors have lost more than half a trillion dollars, and there is much more room for these bonds to fall.  In the end, the overall losses could be well into the trillions even before the stock market collapses.

I know that for most average Americans, talk about “bond yields” is rather boring.  But it is important to understand these things, because we could very well be looking at the beginning of the next great financial crisis.  The following is an excerpt from an article by Wolf Richter in which he details the unprecedented carnage that we have witnessed over the past few days…

On Tuesday, ahead of the ECB’s policy announcement today, German Bunds sagged, and the 10-year yield soared from 0.54% to 0.72%, drawing a squiggly diagonal line across the chart. In just one day, yield increased by one-third!

Makes you wonder to which well-connected hedge funds the ECB had once again leaked its policy statement and the all-important speech by ECB President Mario Draghi that the rest of us got see today.

And today, the German 10-year yield jump to 0.89%, the highest since October last year. From the low in mid-April of 0.05% to today’s 0.89% in just seven weeks! Bond prices, in turn, have plunged!  This is the definition of a “rout.”

Other euro sovereign bonds have gone through a similar rout, with the Spanish 10-year yield soaring from 1.05% in March to 2.07% today, and the Italian 10-year yields jumping from a low in March of 1.03% to 2.17% now.

What this means is that the central banks are losing control.

In particular, the European Central Bank has been trying very hard to force yields down, and now the exact opposite is happening.

This is very bad news for a global financial system that is absolutely teeming with red ink.  Since the last financial crisis, our planet has been on the greatest debt binge of all time.  If we are moving into a time of higher interest rates, that is going to cause enormous problems.  Unfortunately, CNBC says that is precisely where things are headed…

The wild breakout in German yields is rocking global debt markets, and giving investors an early glimpse of the uneasy future for bonds in a world of higher interest rates.

The shakeout also carries a message for corporate bond investors, who have snapped up a record level of new issuance this year, and are now seeing negative total returns in the secondary market for the first time this year.

 

SO WHY IS THIS HAPPENING?

WHY ARE BOND YIELDS GOING CRAZY?

According to the Wall Street Journal, financial regulators in Europe are blaming the ECB’s quantitative easing program…

A recent surge in government bond market volatility can be blamed on the quantitative easing program of the European Central Bank, according to one of Europe’s top financial regulators.

EIOPA, the body responsible for regulating insurers and pension funds in the European Union, has warned that the ECB’s decision to buy billions of euros’ worth of sovereign bonds, to kick-start the region’s economy, has caused markets to become choppier.

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And actually this is what should be happening.  When central banks start creating money out of thin air and pumping it into the markets, investors should rationally demand a higher return on their money.  This didn’t really happen when the Federal Reserve tried quantitative easing, so the Europeans thought that they might as well try to get away with it too.  Unfortunately for them, investors are starting to catch up with the scam.

So what happens next?

Well, European bond yields are probably going to keep heading higher over the coming weeks and months.  This will especially be true if the Greek crisis continues to escalate.  And unfortunately for Europe, that appears to be exactly what is happening

Greece will not make a June 5 repayment to the International Monetary Fund if there is no prospect of an aid-for-reforms deal with its international creditors soon, the spokesman for the ruling Syriza party’s lawmakers said on Wednesday.

The payment of 300 million euros ($335 million) is the first of four this month totaling 1.6 billion euros from a country that depends on foreign aid to stay afloat.

Greece owes a total of about 320 billion euros, of which about 65 percent to euro zone governments and the IMF, and about 8.7 percent to the European Central Bank.

On Tuesday, Greece’s creditors drafted the broad outlines of an agreement to put to the leftist government in Athens in a bid to conclude four months of negotiations and release aid before the country runs out of money.

“If there is no prospect of a deal by Friday or Monday, I don’t know by when exactly, we will not pay,” Nikos Filis told Mega TV.

In fact, there are reports that both the ECB and the Greek government are talking about Greece going to a “parallel domestic currency”

Biagio Bossone and Marco Cattaneo write that according to several recent media reports, both the Greek government and the ECB are taking into consideration the possibility (for Greece) to issue a parallel domestic currency to pay for government expenditures, including civil servant salaries, pensions, etc. This could happen in the coming weeks as Greece faces a severe shortage of euros. A new domestic currency would help make payments to public employees and pensioners while freeing up the euros needed to pay out creditors.

If Greece defaults and starts using another currency, the value of the euro is going to absolutely plummet and bond yields all over the continent are going to start heading into the stratosphere.

That is why it is so important to keep an eye on what is going on in Greece.

But no matter what happens in Greece, it appears that we are moving into a time when there will be higher interest rates around the world.  And since 505 trillion dollars in derivatives are directly tied to interest rate levels, that could lead to a financial unraveling unlike anything that we have ever seen before in the history of our planet.

As I have warned about so many times before, 2008 was just the warm up act.

THE MAIN EVENT IS STILL COMING, AND IT’S GOING TO BE EXTREMELY PAINFUL.

Michael Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.

Read the article here at Sleuth Journal:

 

By: Voice of Reason

FOR MORE NEWS BY VOICE OF REASON CLICK HERE!

www.thelastgreatstand.com

 

THE VOICE OF REASON

 
Burning Dollar

FOR LINKS TO UNDERSTAND THE ECONOMY & THE COMING ECONOMIC COLLAPSE:

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FOR MORE LINKS ON MARTIAL LAW:

Fema Camp 1

FOR MORE ON FEMA CAMPS:

 

BE SURE TO CHECK OUT THE GIFT SHOP!

Militia

 

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  • “…buying Gold to hedge the impending IMPLOSION? Wow, Let me know how that blissful ignorance works out for you and your families.”
    The point is: exchange your currency for a commodity. You might f’rinstance buy barrels of oil, or crates of whisky. But gold is easier to store.

    “This is going to be a global DEPRESSION worse than our civilization has ever seen.”
    The concept of a depression never existed pre-1913. ‘Our civilization’ is a bit older than that.

    “We have become so fat and stupid in America, and thanks to liberals re-writing history, no one actually knows the REAL history…”
    Oh, come on, don’t be so modest. I’m sure you have some good qualities. Oh, I see! You didn’t mean yourself – you meant everybody else. OK, carry on.

    “Having the world Reserve Currency has given America special privileges and ENORMOUS power over the years… power we abused.”
    This, alas, is very true. Power and abuse walk hand in hand.

    “YOU ARE BROKE, AND YOU ARE OBSOLETE!”
    This is precisely what the USA said to Britain in 1932 when they defaulted on their WW1 repayments. These things come to us all. The lesson however is: be nice to people, and they might be nice to you when it’s time to change the catheter.

    “THE WORLD IS ENTERING A NEW ECONOMIC ERA – ONE THAT WON’T BE DEFINED BY AMERICA!”
    So what?

    “…insane union pensions…”
    Interesting switch from global to domestic. Personally I think the US working man has suffered from NOT having a decent strong labour oriented trades union system. TPTB has spent the last fifty years destroying that very thing. Why. Because a general strike brings any government to its knees within days. Just imagine – on September 1st the entire population of the USA says ‘Excuse me, I’m getting off the treadmill for a couple of weeks. I’m a complete non-entity so you won’t miss me.’ Could that be why unions are ‘insane’?

    I can’t bothered to take the piss out of the next three pages.

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