Jim Willie is saying some important things. The bursting of the bond bubble could be relatively close. We have a double bottom forming for sure on the 5 year yields, and arguably on the 10 year as well. so, the logic is this:
“Watch the Gold/Oil Ratio, which is poised to rise noticeably. Gold is the commodity king, namely it is money. The worldwide recession will keep the crude oil price subdued until the USTreasury bubble pops. Then, at that time, several major commodity hedges will jump in price, rendering a cost shock to the USEconomy. It is broken to the core, broken at the foundation, broken from grotesque imbalances, broken from vast pervasive insolvency. An inflationary depression lies dead ahead! Notice the recognition of Gold, its distinction as the king of commodities. The usual accepted hedge against the USDollar in Wall Street and London accounts has traditionally been crude oil.”
Me talking here:
The key words here are “inflationary depression”.
This is the final nail in the coffin. The bond bubble bursting implies higher interest rates and (much)higher prices for energy and other imported necessities. Employment, and the tax base collapses. Sovereign debt crisis for America rapidly becomes a currency crisis. With employment collapsing, money scarce, and the purchasing power of the money collapsing as well, all social and political structures collapse.
Similar events at varying magnitudes will occur across the West.
My thinking, this could all happen within a year of the first real recognition that the bubble has “burst”.
There is an earlier technical signal that would confirm a bond bubble bust then the upper trendline failure I have been mentioning. The 5 and 10 year yield curves have a sort of double bottom in place, or forming, as I have mentioned. The high point between the double bottoms, is at a yield of 2.8% on the 5 year, and 4% on the ten year notes. Those levels, when exceeded, will suggest to a lot of Bond technicians that the moment of truth has arrived.
If investors hear these concerned raised by the technicians, it may precipitate the crisis.
I would encourage all of you out there to examine these bond charts and familiarize yourself with the patterns I am pointing to...
Looking at the charts themselves, it is entirely possible that this point of recognition could be less than a year, or as little as some months out, depending on the way the charts develop...
Take steps to protect yourself..buy some physical precious metals...
Chart symbols :$TNX and $FVX referenced to Bigcharts.