U.S. Treasury Bond Market Major Top Report
Interest-Rates / US Bonds Sep 18, 2012 - 01:41 PM GMTBy: EWI
BOND YIELDS ARE POISED TO BEGIN RISING ON THE WAY TO DEFLATIONARY CREDIT CRISIS
U.S Treasury Bonds Our long term outlook for interest rates on U.S. Treasury securities has been a contrary opinion for many years. Most commentators have been expecting either economic expansion or Fed-induced inflation to push bond yields higher. Conquer the Crash predicted that long term rates on AAA-rated bonds would fall much further as the monetary environment shifted from lessening inflation to outright deflation. Figure 1 shows the forecast from 2002, and Figure 2 updates the graph to the present.
Free 10-Page Report: Major Top in the Bond Market on the Way
Prechter's message to bondholders today: Beware.
Prechter warned investors about looming destruction in tech stocks, real estate, blue chips and commodities -- all at a time when conventional wisdom considered them "safe."
Here's what he's saying now: Whether you have your money directly in bonds or your mutual fund does, your savings could be at risk.
"In line with our forecast," Prechter says, "the interest rate on the Treasury's 10-year note has just plunged to the lowest level in U.S. history. … "Investors think that the issuers of all the bonds they are buying will stay solvent and pay both interest and principal. We don't think so. We think the economy is still sliding into depression, and when that trend accelerates, investors' waxing fears will cause them to start selling bonds, which will lead to lower bond prices and higher yields."
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Best Regards,
About the Publisher, Elliott Wave InternationalFounded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.
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