Thursday, May 29, 2008

US 10 & 30 Year rates

The long-term trend line is still intact for long-term yields. This higher interest is the last thing the US economy can afford, as you would have the combination of higher commodities prices, higher interest rates, decelerating credit growth, and falling asset values that is toxic to economic growth. This combination is a tsunami of future debt deflation counter to inflation fears around the world


On that note, I get quite a bit of emails that inflation is in our future, the point to the shadow statistics numbers. I agree with these numbers, inflation is probably much higher that the governments would let us know.  However, I ask the question, if rates were really reported then the bond market would have taken off which would have not allowed the Real Estate market to blow off which would have not brought us where we are today...


I suggest that you look at Asia in the 1997-1998 periods where inflation numbers collapsed within a year… I would suggest that this would be the case as the global recession spreads...  Real Estate is a lagging indicator, so is inflation so is the commodities blow-off...  Do you really believe the economy can grow at all if we get another move of over 20-30% in commodities and or interest rates?


Checkmate for the global economy. 



This Global Historical probability model is intended for information only and under no circumstances should items be considered as recommendations to purchase or sell investments.
Any statements contained herein that are not based on historical fact are forward-looking statements. Any forward-looking statements represent the Investment advisor’s best judgment as of the present date as to what may occur in the future. However, forward-looking statements are subject to many risks, uncertainties and assumptions, and are based on the Investment advisor’s present opinions and views. For this reason, the actual outcome of the events or results predicted may differ materially from what is expressed. Furthermore, this investment advisor’s views, opinions or assumptions may subsequently change based on previously unknown information, or for other reasons. The Investment advisor assumes no obligation to update any forward-looking information contained herein. The reader is cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements.

These are my own views, please enjoy these insights