Massive government borrowing and money printing have global investors stampeding for the exits: The U.S. dollar is plunging ... yields are surging ... gold and silver are on a rampage. ALAN FRANKLIN writes: This is how investment advisor Martin Weiss starts his latest newsletter, which we reprint below. I agree and have been saying the same for several years. The crunch is coming and there will be NO recovery, for America and Britain are being judged. Expect things to get worse, fast.
How can companies prosper when the people who would buy their goods and services are being laid off? How can the economy recovery when more and more money is being lost every day? Shopping malls and commercial premises are closing all over America, Britain and elsewhere. They were built to serve a bubble economy that has now burst. Empty offices and malls pay no rents, which in turn hits pensions, for pension funds have big commercial realty holdings. Talking of pensions, our governments cannot pay for a more than a fraction of all the healthcare and pension costs looming on the horizon as the baby boomers start to retire.
Britain's biggest commercial real estate firm just wrote down its portfolio by several billion pounds. This is the shape of things to come, not some mythical "green shoots." Wait till all the credit card debt washes up like a tidal wave. Wait until the next lot of mortgage re-sets comes up. There is a lot more trouble brewing and things are a lot worse than you are being told. Don't expect big media to say this- it puts off their advertisers, those few that are left! For newspapers are closing down everywhere too.
Fortunately you still have the web. Enjoy it, in the small time remaining while it is free and uncensored. And get our books and DVDs while we are still able to deliver them. Look on our web shop for details. Now here's Dr Weiss.
Just as we warned, Treasury bond prices are collapsing.
Massive government borrowing and money printing have global investors stampeding for the exits: The U.S. dollar is plunging ... yields are surging ... gold and silver are on a rampage.
BEWARE: Historic stock market bloodletting just ahead — contrarian investments set to soar. Here’s what to do immediately to protect yourself and profit:
This is it, Subscriber!
We told you this day would come; and it is dawning NOW:
Yesterday, the price of long-term Treasury bonds collapsed and they’re continuing to fall this morning. Overall, they’re down more in the last five months than at any time in decades.
Two months ago, in the April issue of our Safe Money Report, we warned about this. We told readers the next giant shoe to drop would be a fiasco in the Treasury bond market. Now it’s happening!
By absorbing trillions of dollars of toxic assets, we explained, “Washington has transformed itself into a toxic government. So it should come as no surprise that the government’s most volatile securities — bonds — will be the next victim of the market’s revenge.” We concluded:
“Now, brace yourself for the next shoe to drop in this massive debt crisis: Government bonds!”
We’ve sent you this message over and over again in all our publications.
I made it the centerpiece of the white paper I presented to the press at the National Press Club in March and then delivered to Congress the same day.
I’ve shouted it from the rooftops and distributed it to thousands in the media of all persuasions.
My message was — and is — simple:
- There are severe limits on how much Washington can loan or commit to save failed corporations and stimulate the economy.
- The day will soon come when our skyrocketing federal deficits, massive Treasury borrowing and Federal Reserve money-printing turns U.S. stocks and bonds into an exploding time bomb for investors worldwide.
- When global investors begin recoiling in horror, there will be hell to pay. And when concerns about America’s top credit rating surface, we’ll see investors stampeding for the exits, crushing the U.S. dollar and stock market.
Every one of these dire forecasts
is now being fulfilled — in spades!
Just yesterday ...
- Steven Hess, lead analyst for Moody's Investors Service warned that the AAA rating on the United States is not guaranteed. "There are longer-term pressures on the rating, that's very clear," he said.
- Bill Gross, manager of the world's biggest bond fund PIMCO, warned that the United States will eventually lose its top AAA credit rating and any downgrade would crush the investment markets. “The market will recognize the problems before the rating services — just like it did today," said Gross.
- Even U.S. Treasury Secretary Timothy Geithner sounded the alarm yesterday. In testimony before Congress, Geithner warned, "We must get our fiscal house in order or risk having government borrowing crowd out productive private investment.”
- In its minutes Wednesday, the Fed said that, to reduce the tidal wave of U.S. Treasuries now flooding the market, it will probably have to kick the printing presses into overdrive and buy those Treasuries itself! But the supplies of Treasuries dumped on the market are so overwhelming, even the Fed can’t stop Treasury bond prices from collapsing.
And even though these are just the first of many voices, the investment markets are already recoiling in horror.
Treasuries plunged; yields on the benchmark 10-year treasury exploded to nearly 3.4%. The U.S. dollar plunged to a four-month low. Gold and silver took off like a pair of scalded cats. And the Dow sank.
Global investors are saying, “Enough is enough!”
Look: When China, Japan and other foreign investors cut back their buying of U.S. Treasury bonds — or sell more than are being bought — interest rates inevitably soar.
In more normal times, that might be tolerable. But at a time like this — with the U.S. economy already in the tank — higher interest rates will positively kill stocks. And, they will hand contrarian investors windfall profits.
For specific instructions on how and when, click here for my updated report I’ve just posted to the Web.
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