This should not be taken lightly.
Alan Greenspan is a name almost synonymous with finance. The former chair of the FED, he just issued a massive warning: there is a huge bond market bubble and it’s about to pop!
Hey, that’s funny, we said the same thing back in March 2017….nice to see Greeny catching up!
In all seriousness, we’ve been tracking this for a while and we still view fall 2017 as an extremely dangerous period for the markets. Here’s what we wrote back in March of 2017:
Mark it down, time stamped March 4, 2017.
Call it a prediction. Call it a prophecy. Ignore it. I don’t care. But I’m putting it out there.
I predict there will be a massive market crash in fall of 2017. More specifically, around August to November. While the stock market and real estate markets will be affected, it will not be like 2008. This will be a bond (debt) market collapse, not primarily a real estate or stock market crash. The crash will be caused (on the surface) by a rising rate environment, where rising rates throw debt instruments into default. What follows will be a domino effect of defaults, quickly expanding to include sovereign debt defaults (countries). No, I do not believe the U.S. will default, but we will be affected.
The crash will be caused by the same shadow government that has been manipulating world economies for the last century. I believe globalist financiers like George Soros and his ilk are contributing to the current booming stock market, attempting to run up the markets as high as possible so they can short them at the absolute peak. For this reason I expect the market to continue booming big through at least August. They need time to unload all their shares at peak prices and then enter short positions.
Then the crash will come unexpectedly (except for people who read this and heed this warning). It will be swift and violent, even quicker and bigger in scope than what we saw in 2008.
But fear not! This is not bad news. This is a global wiping out of debt! It’s the biblical concept of Jubilee! All the debt Obama and his predecessors heaped upon this country has become heavy shackles that have nearly destroyed us….and will eventually destroy us if not dealt with. The massive wiping away of debt will be painful for a very short period of time, but what will follow will be the most prosperous period in U.S. history!
Look at who Donald Trump just appointed as Sec. of Commerce. Wilbur Ross is known as “The King of Bankruptcy”. What a coincidence that Trump would appoint him to this very important role. Who better to guide the U.S. through this process. To wipe out the debt that has enslaved us so we can start fresh!
With the debt removed, the U.S. will be poised for a dramatic period of prosperity and growth, the likes of which have not previously been seen in this country.
The fall crash will be the single best buying opportunity of anyone’s lifetime.
While I am not giving any financial or investing advice, only giving my personal opinion, those who transition to all cash or even short positions near the end of summer will be best poised to survive and profit from the crash, and purchase assets for pennies on the dollar afterwards.
You’ll want to either be in mostly cash, gold, or inverse market funds. I like FAZ, but keep in mind it is highly volatile. And again, I am offering no financial advice or recommendations to anyone, just stating my opinions. FAZ currently trades in the $17s and I suspect it will drop as low as $13 by end of summer. That’s when I want to buy. The most aggressive speculators might enjoy FAZ Jan. 2018 or Jan. 2019 out of the money calls, but this is a very complicated and risky position. If this prediction is right, those positions would lead to 10,000% or more gains. Don’t say I didn’t warn you!
Read the full article here.
I think Alan Greenspan has been reading AFP because this is what he said just this morning, from CNBC. Look how closely his bolded part is with mine written 5 months earlier:
Alan Greenspan, the former Federal Reserve chairman who has a knack for saying memorable things about the markets, is warning of a bond bubble.
“By any measure, real long-term interest rates are much too low and therefore unsustainable,” Greenspan told Bloomberg News in an interview. “When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace.”
The economy is about to enter a phase of rising inflation, and that sets up the bond market for overheating if it continues. Already Treasury yields have fallen so much there doesn’t seem to be room to go lower. Bond yields move inversely to bond prices. Before 2008, the 10-year Treasury bond yielded 4 percent or more. That yield has been persistently below 4 percent since then, currently at 2.3 percent. Eventually, things should revert to normal, and that’s what’s worrying the former Fed chairman.
Greenspan, who has talked about a bond-market bubble for a couple of years, adds in the interview, “When the bond-market bubble collapses, long-term interest rates will rise.”
That could spill over to the stock markets, which keep hitting record highs. Greenspan and others use a method called the Fed Model, which looks at the price of stocks versus bonds. Investors would rightly pick the undervalued asset, and right now, that is stocks.
As Bloomberg puts it: “Using Greenspan’s reference of 10-year inflation-adjusted bond yields, currently around 0.47 percent, the gap with the S&P 500’s earnings yield at around 4.7 percent, is 21 percent higher than the 20-year average. That justifies records in major equity benchmarks and P/E ratios near the highest since the financial crisis.”
Folks, we don’t give financial advice here, we are just watchmen saying what we see.
And while you have to make your own financial decisions, our personal belief is that FAZ, SQQQ, QID, silver and cash are going to be the strongest positions to be in. We expect at least 50% of the value to be cut out of the stock market shockingly quick.
Please SHARE to alert your friends and family! Don’t say we never warned!
And by the way, this is no reflection on Trump. We are 100% pro-Trump. This is the prior administration’s mess.
Please comment below….what do YOU think?