US government bond crisis is imminent
The guest argued that US Treasury bond prices are set to break below their multi-year support levels, driving yields to new highs and triggering a sovereign debt crisis.
The argument
The speaker pointed to broken momentum uptrend lines on long-term bond charts, suggesting the Federal Reserve has lost control of the long end of the curve. This structural shift is expected to force massive central bank money printing, rendering bonds ineffective as a portfolio diversifier.
The thesis, stress-tested
✓ What validates it
- ✓T-bond prices falling below the $111 to $110 range
- ✓Official announcements of emergency bond-buying programs by the Federal Reserve
▸ Risks discussed
- ▸Central banks successfully capping yields through yield curve control
- ▸Deflationary shock driving temporary flight-to-safety in bonds
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE