If yields on U.S. Treasury bonds keep rising, things are going to get very messy. What we are ultimately looking at is a sell-off very similar to 2008, only this time we will have to deal with rising interest rates at the same time. The conditions for a “perfect storm” are rapidly developing, and if something is not done we could eventually have a credit crunch unlike anything that we have ever seen before in modern times. Let me explain.
…At the moment, perhaps the most important number in the financial world is the yield on 10-year U.S. Treasuries. A lot of investors are really concerned about how rapidly it has been rising…[and if they continue to do so] it is going to have a dramatic effect throughout the economy…
We are rapidly moving into unprecedented territory. Nobody is quite sure what comes next.
Sadly, most Americans:
- have absolutely no idea how vulnerable the financial system is,
- have absolutely no idea that our system of finance is a house of cards built on a foundation of risk, debt and leverage,
- have complete and total faith that our leaders know what they are doing and are fully capable of keeping our financial system from collapsing [and, as such,] in the end,
- most Americans are going to be bitterly, bitterly disappointed.