Looks like most everyone reading this post see's the big picture.
Different views...but everyone understands.
If you're young, in debt, underwater, unemployed, or a wage earner...BamBam's your man.
But if you are old, retired, fixed income, no debt, have savings, or hold equity....BamBam has you on your knees and you're taking some financial porn...doggie style!
If you are confused now, wait until 2012. Over 15% CPI AND a 2% 10 year bond at the same time. Many people will be killed trying to short bonds in this period.
This is a rare cyclical period, where commodities and bonds are BOTH in a bull market at the same time. An overlap.
This HAS happened in the past, and it will happen again. How is this possible?
Well, I don't quite understand it myself, but there is a threshold that has been breached where there is too much liquidity. At this point, rates go down instead of up. There is so much liquidity that there is more liquidity than bonds available. Also the bond market is pricing in future defaults, rates go even lower.
This is a Kondrieff Winter. Google that, you will understand why Bonds peak during this time period, no matter what.
because, employment is negative, house price is negative, oil price crash is negative (it shows economy stinks) and oil price decline cannot create good jobs, pm declines is due to government spending which also will decline meaning the dollar gets stronger which is negative for silver price. and other commodities, and rising dollar is not so good for competitive business HERE doing business overseas, and paying very high tax rates HERE.
this is bullish for bond rates. very bullish.
1. Huge deflationary pressures that have not been released. Lower percentage of workforce working, higher fees and taxes on the horizon, less discretionary income (ie if you spend more on gas and food that leaves less for manufactured goods and services) The same thing is going on around the globe. Demand for Gas in the US has been falling for 6 months.
The rise in gas and food is being fueled by speculators and FED easy cash. These people have to store these goods somewhere and at some point they will be forced to sell. They will have to sell into a market where no one has any cash. Combine that with the slashed gov spending and collapsing housing going on around the US and the bubbles in china and you see that deflation is still on the horizon.