Something Big Around the Corner?

[ChooseLiberty]

Have to agree with Marty here. Looks like interests rates could pop soon which will further hemorrhage real estate and hit stocks and (should I say it? GASP!!!!!) GOLD/commodities.

Eeeeeeek!!!! Not GOLD!!!! PLLLLEEEZZZZ NOT GOLD!!!!!

YMMV.


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Something big is around the corner ... a large move in the interest rates. At least, that is what the 10 year yield chart is telling us now.

Take a moment to look at the (TNX) 10 year yield chart. A very large triangular formation has occurred. It started in May and it is now working its way to its apex where a breakout will occur.

From a technical projection standpoint, a 9 point move should occur from the breakout point ... up or down. That is a very large move and it will have an impact on housing, automobiles, and anything requiring a loan. And yes ... it will also have an impact on the stock market.

The question is whether the breakout will be up or down?

For the past few months, the Fed has been actively engaged in the market and buying down rates in an effort to feed/nurse an economic recovery. But, this week, Bernanke announced that the Fed would stop their interest rate buy down program by the end of October.

If this market influence is removed, it would seem reasonable to expect interest rates to rise without that dampening influence. If rising interest rates is the direction that could happen, then the affect on the housing market and large financed purchases will be very negative because of the projected magnitude of the interest rate rise.

http://www.safehaven.com/article-14267.htm

 

[galvestoncondo3114]

the big move will be down in rates. fed is fixing to buy a trillion dollars plus of govt/agency bonds. this comes from the fed's own disclosure documents.

source: andy gause radio show. andy reads all of that arcane b.s. the fed publishes.

the run down from 4 to 3.5 is the nyc banksters frontrunning the fed's buys.

 

[ChooseLiberty]

"the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October."

http://www.federalreserve.gov/newsevents/press/monetary/20090812a.htm

 

[hugolp]

"the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October."

http://www.federalreserve.gov/newsevents/press/monetary/20090812a.htm

The comitte said it would finish purchaising Treasuries and two weeks after said it would finish a month after. They are just trying to make people believe that they are responsable and that they are not going to create massive inflation. Its all a PR game. They are going to keep monetizing the debt because otherwise nobody is going to buy the huge Obama deficit.

 

[tmosley]

There is no way the Feds are going to let rates go up. That would force them to raise taxes, which would be political suicide. Or it would force them to raises taxes to greater than 100% of GDP, which would be national suicide.

Volcker Ben Bernanke ain't.

 

[MrNick]

I don't believe we'll have any big collapse, but a slow steady decline over the next 20-30 years. We will still be a major world power but we won't have it nearly as good as we did or should have.

 

[tmosley]

We started declining the the late 80's with the government's response to the S&L crisis.

So it's already been 30 years. It never looks like you're sinking from inside the ship.

 

[hugolp]

Btw, Israel central bank rose its interest rates yesterday.

 

[buffalokid777]

There is no way the Feds are going to let rates go up. That would force them to raise taxes, which would be political suicide. Or it would force them to raises taxes to greater than 100% of GDP, which would be national suicide.

Volcker Ben Bernanke ain't.

I agree with you.

 

[Zippyjuan]

Taxes of 100% of GDP would be plenty enough to wipe out the entire debt of the country in less than one year. GDP is like $14 trillion while the debt is under $12 trillion according to the Debt Clock.

I think that Treasury rates will be rising in the future. They have been basically rising since early in the year. They hit bottom when investors had no faith in other investements and were willing to accept near zero return on their money as long as it meant that they would not lose more money like they were doing on stocks and other investments. Now they are feeling more comfortable putting their money in other places (just look at what the stock market has done since March) and the Treasury is having to issue more notes to cover the massive spending spree the government has been on so you have decreased demand for Treasuries to go along with an increased supply of them on the market. This will lower prices for them and that means higher interest rates the government will have to pay to continue borrowing.