Bond yields for U.S Treasuries have been rising at one of the fastest paced rates in U.S. history. This has caused concern on Wall Street and has become a major focus. Bond King, Jeffrey Gundlach, has said that the yield will rise and as the 10-year Treasury yield approaches 3%, it will cause market turmoil. He has encouraged investors early last year to also invest in Gold. Recently with the U.S. stock market correction, many investors have lost tens of thousands of dollars. A total of over $3 Trillion was lost in market volatility. Many analysts are telling investors not to sell because the economy is on firm footing and this is a normal correction. The U.S. stock market only had a taste of the potential downturn caused from higher bond yields which was due to the Fed unwinding their balance sheet at the start of this year. The biggest test yet to come according to Morgan Stanley, uses the analogy of a meal in that this is an, “Appetizer, not the main course,” which is how the bank strategists recently described the sell-off. Goldman Sachs economist Daan Struyven reported that if there was a surge of the 10-year Treasury yield to 4.5% by year-end, it would cause another 20% to 25% decline in equity prices. Brian Levine, co-head of global equity trading at Goldman Sachs, recently sent out an email to the investment banks larger clients which stated a stunning prediction, “The Buy the Dip Regime is now over. The ‘buy the dip’ mentality needs to be thoroughly punished before we find the bottom.” [Read more…] about Feb Newsletter: The Fed is Selling, The Government is Spending, & The Treasury is Creating, but are These Three Bubbles Bursting?
Monthly Newsletter
January Newsletter – Is This the Year of the Sell Off?
As most of the world knows, we had a government shutdown recently that was focused around a non-budget item DACCA. After the government was shut down for 3 days, Congress passed a short term Continuing Resolution (CR) Bill that keeps the government open until February 9th. Since President Trump has been in office there have been four times now that they have not agreed upon raising the Debt Ceiling. [Read more…] about January Newsletter – Is This the Year of the Sell Off?
December Newsletter – Security and Peace of Mind During Uncertain Times
A historic moment happened recently that was one of the defining moments for President Trump, the signing of the tax bill titled: The Tax Cuts and Jobs Act. The bill was the most significant legislative victory for President Trump. The Tax Cuts and Jobs Act will raise $4 trillion in revenue to help offset tax cuts by closing the door on dozens of corporate accounting tricks. Washington isn’t spared either, as Members of Congress will no longer be able to deduct their living expenses. It provides $5.5 Trillion in tax cuts with a net result in deficit spending of $1.5 trillion which will be added to the national debt. [Read more…] about December Newsletter – Security and Peace of Mind During Uncertain Times
November Newsletter – The Fed’s Influence, a Benefit or a Bubble?
The holidays are certainly upon us with many of us already having had our fill of turkey. The coming weeks may be filled with many friends and family, food and memories but of course the holidays can also bring stress, not unlike some of the topics in this month’s newsletter. I usually pick one topic and write in depth about that; however, this month I am giving a few updates on several topics that I have written about in previous issues of our newsletter. I value your time in reading our newsletter and would like to make mention, that if you have been a regular subscriber you should make sure to read the last topic in this month’s newsletter discussing the year-end discount. With that said, let’s review moves the Fed could make in response to European Central Banks latest policy updates. [Read more…] about November Newsletter – The Fed’s Influence, a Benefit or a Bubble?
October Newsletter – Black Gold for Yellow Gold, The Trade That Changes The World
While most of the financial world is paying attention to the U.S. stock market reaching another high, quietly, a major announcement came out of China that will put them on the global currency map like never before. China announced in September the creation of future Oil contracts, which will be open to international traders, and countries. What makes this historical move unique, is that payments will be made in their country’s currency, the Yuan, which is convertible to Gold. How does a country get their currency to compete with the U.S. Dollar? Simple, first set up their currency to be able to trade in the largest commodity in the world, Oil. Then, make those payments in the second largest traded commodity globally, Gold. This announcement is major because China has done just that! While this move provides the first official link between Oil and Gold, the stronger link is with the Chinese currency and Gold. [Read more…] about October Newsletter – Black Gold for Yellow Gold, The Trade That Changes The World
