Tag Archives: higher interest rates

It is appropriate that the fiscal crisis of the West has begun in Greece, the birthplace of Western civilization. Soon it will cross the channel to Britain. The key question, however, is when that crisis will reach the last bastion of Western power, on the other side of the Atlantic. Words: 609

Looking forward, our formula for working out of the current deficit pattern would be to have the Republicans regain control of one house of Congress (but not both houses of Congress plus the White House). The economy fully recovers. I’m not ready to forecast surpluses to come, but I can envision the deficits coming down to reasonable magnitudes. Words: 1438

Brace yourself for one of the greatest interest-rate surges in decades — beginning first in the long-term Treasury markets ... later spreading to shorter term Treasuries ... and ultimately enveloping nearly every loan, debt, credit, and money market instrument on the planet. This rise may not begin with great fanfare, nor will it immediately upset the apple cart of the economic recovery, but with the march of time, it WILL gain momentum and reach critical mass. Words: 614

A recent research paper* by the Bank for International Settlements, entitled "The Future of Public Debt: Prospects and Implications" paints a terrifying prospect for the inhabitants of most of the developed world with deficits spiralling out of control for every western industrialized country under study and inflation a foregone conclusion as a result. Words: 1128

We've been enjoying historically low interest rates for the last decade ... even more so in the last two years and we know the party is going to end at some point. Well, I'm beginning to suspect the end will come sooner rather than later but you don't have to just sit still and accept it. There are exchange-traded funds (ETFs) that, if used properly, can protect your principal and enable you to profit from rising rates. Words: 871

Robert Precther recently published a list of market myths for his subscribers which I'm sure he won't mind if I review the lessons he voices in his article with you, borrowing from his excellent research to help make the arguments. Recognizing these market myths are critical to your success as an investor. Words: 1266

Financial pundits have been cheering the declining U.S. trade deficit, but they should be careful what they wish for. Once the U.S. is no longer running a huge trade deficit, then all those exporter nations will no longer have hundreds of billions of dollars floating around, looking for a home in Treasury bonds. Interest rates are about to start rising, and will continue rising for a generation Words: 782

“Unchecked greenback emissions will certainly cause the purchasing power of currency to melt.” says Warren Buffett. Words: 982 In the following edited excerpts from the original article* Cam Hui (www.questfunds.com) puts forth the case for both inflation and deflation by the likes of Richard Russell, Warren Buffett and Van Hoisington: The Case for Deflation 1. De-leveraging There are many analysts …

The FED chose to solve the problem of too much debt by creating even more debt by taking the unprecedented action of buying it’s own debt under euphemisms like “quantitative easing” and “debt monetization” and also covert buying to artificially force negative real return rates of interest. Through this course of action, the FED so far has been able to turn what would have been a rapid deflationary collapse into a decaying inflationary depression which is euphemistically called “a recession that is now over”. Words: 955

In a search for safety and income, investors are stampeding into the apparent safety of government bonds and bond mutual funds. Over the last year, bonds have been purchased in record amounts despite historic low interest rate levels. It is likely that many of these investors do not understand the risks in bonds. These investors, with a false sense of security, are unknowingly setting themselves up for another rough rollercoaster ride ahead. Words: 599