Recently our good friends at Casey research published the following chart comparing the inflation adjusted Gold returns to stocks and bonds for the period 1971 through the present. From this chart we can see that as bonds fell during the late 1970's gold rose equivalently and stocks were basically flat. During the 1980's bonds rose and gold fell while while stocks rose slightly. During the 1990's stocks rose sharply gold fell and Bonds were volatile but basically flat to slightly up. During the 2000's gold was up sharply, stocks were volatile and bonds were pretty flat. … [Read more...]
Is Gold Backwardation Now Permanent?
Its Weight in Gold: The Real Prices of Things By Keith Weiner, Casey Research Worldwide, an incredible tower of debt has been under construction since President Nixon's 1971 default on the gold obligations of the US government. His decree severed the redeemability of the dollar for gold and thus eliminated the extinguisher of debt. Debt has been growing exponentially everywhere since then. Debt is backed with debt, based on debt, dependent on debt and leveraged with yet more debt. For example, today it is possible to buy a bond (i.e., lend money) on margin (i.e., with borrowed money). The time is now fast approaching when all debt will be defaulted on. In our perverse monetary system, … [Read more...]
United STRAITS of America: The Muni Bond Crisis Is Here
This November, the whole world tuned in as the greater part of the U.S.A.'s 50 states turned red -- and no, I don't mean the political shift to a republican majority during the November 2 mid-term elections. I mean "in the red" -- as in, financially fercockt, overdrawn, up to their eyeballs in debt. Here are the latest stats: California, Florida, Illinois, and New Jersey now suffer "Greek-like deficits," alongside draconian budget cuts, job furloughs, suspensions of city services, and the growing "rent-a-cop" trend of firing city workers and then hiring outside contractors to fill those positions. Next is the fact that the municipal bond market has been melting like a snow cone in the … [Read more...]
The Next Major Disaster Developing for Bond Holders
Elliott wave analysis can warn you of trend changes when the rest of the investment public least expects a market reversal. With that in mind, we have created a new report for our free Club EWI members: "The Next Major Disaster Developing for Bond Holders." In this free report, you get some of the latest commentary on fixed-income markets adapted from various Elliott Wave International's publications, including 2010 issues of Robert Prechter's monthly Elliott Wave Theorist and its sister publication, The Elliott Wave Financial Forecast. Enjoy this excerpt -- and for details on how to read this important Club EWI report free, today, look below. … [Read more...]
Moving into Bonds: From Frying Pan to Fire
By David Galland and Kevin Brekke, Casey Research The other day, I came across an article that said, while individuals may be moving their money out of equities, they have been moving into bond funds – and in a big way. It’s called jumping from the frying fan into the fire. Based on my experience as a co-founder of a mutual fund group, I can tell you that if there is one sure thing in this world, it’s that when investors rush en masse into an investment category, it is invariably at almost exactly the wrong time to do so. Is that the case with today’s rush into bonds? To shed some light on that point, Casey Research Switzerland-based editor Kevin Brekke volunteered to look into … [Read more...]
Video: Bond Issuers Aiming Toward Debt Man’s Curve
By Jason Lureman Thu, 09 Sep 2010 They say a picture is worth a thousand words, so a chart as startlingly clear as our Debt Man's Curve must be worth 10,000 words. EWI analyst Jason Farkas first created and wrote about this parabola that displays different risk levels of bonds in late July 2010. Specifically, the chart plots sovereign, municipal and corporate issuers on the same spectrum. The resulting sharp curve up makes it easier to see why we think that bond issuers are flirting with a bad crash the same way the driver does in Jan and Dean's hit song from the 1960s, "Dead Man's Curve." More recently, Jason recorded this 10-minute video to take his Currency and Interest Rate … [Read more...]
