Did The Bond Market Crash Just Begin?

Is the financial collapse that so many are expecting in the second half of 2015 already starting?  Many have believed that we would see bonds crash before the stock market crashes, and that is precisely what is happening right now.  Since mid-April, the yield on 10 year German bonds has shot up from 0.05 percent to 0.89 percent.  But much of that jump has come this week.  Just a couple of days ago, the yield on 10 year German bonds was sitting at just 0.54 percent.  And it isn’t just Germany – bond yields are going crazy all over Europe.  So far, it is being estimated that global investors have lost more than half a trillion dollars, and there is much more room for these bonds to fall.  In the end, the overall losses could be well into the trillions even before the stock market collapses.

I know that for most average Americans, talk about “bond yields” is rather boring.  But it is important to understand these things, because we could very well be looking at the beginning of the next great financial crisis.  The following is an excerpt from an article by Wolf Richter in which he details the unprecedented carnage that we have witnessed over the past few days…

On Tuesday, ahead of the ECB’s policy announcement today, German Bunds sagged, and the 10-year yield soared from 0.54% to 0.72%, drawing a squiggly diagonal line across the chart. In just one day, yield increased by one-third!

Makes you wonder to which well-connected hedge funds the ECB had once again leaked its policy statement and the all-important speech by ECB President Mario Draghi that the rest of us got see today.

And today, the German 10-year yield jump to 0.89%, the highest since October last year. From the low in mid-April of 0.05% to today’s 0.89% in just seven weeks! Bond prices, in turn, have plunged!  This is the definition of a “rout.”

Other euro sovereign bonds have gone through a similar rout, with the Spanish 10-year yield soaring from 1.05% in March to 2.07% today, and the Italian 10-year yields jumping from a low in March of 1.03% to 2.17% now.

What this means is that the central banks are losing control.

In particular, the European Central Bank has been trying very hard to force yields down, and now the exact opposite is happening.

This is very bad news for a global financial system that is absolutely teeming with red ink.  Since the last financial crisis, our planet has been on the greatest debt binge of all time.  If we are moving into a time of higher interest rates, that is going to cause enormous problems.  Unfortunately, CNBC says that is precisely where things are headed…

The wild breakout in German yields is rocking global debt markets, and giving investors an early glimpse of the uneasy future for bonds in a world of higher interest rates.

The shakeout also carries a message for corporate bond investors, who have snapped up a record level of new issuance this year, and are now seeing negative total returns in the secondary market for the first time this year.

So why is this happening?

Why are bond yields going crazy?

According to the Wall Street Journal, financial regulators in Europe are blaming the ECB’s quantitative easing program…

A recent surge in government bond market volatility can be blamed on the quantitative easing program of the European Central Bank, according to one of Europe’s top financial regulators.

EIOPA, the body responsible for regulating insurers and pension funds in the European Union, has warned that the ECB’s decision to buy billions of euros’ worth of sovereign bonds, to kick-start the region’s economy, has caused markets to become choppier.

And actually this is what should be happening.  When central banks start creating money out of thin air and pumping it into the markets, investors should rationally demand a higher return on their money.  This didn’t really happen when the Federal Reserve tried quantitative easing, so the Europeans thought that they might as well try to get away with it too.  Unfortunately for them, investors are starting to catch up with the scam.

So what happens next?

Well, European bond yields are probably going to keep heading higher over the coming weeks and months.  This will especially be true if the Greek crisis continues to escalate.  And unfortunately for Europe, that appears to be exactly what is happening

Greece will not make a June 5 repayment to the International Monetary Fund if there is no prospect of an aid-for-reforms deal with its international creditors soon, the spokesman for the ruling Syriza party’s lawmakers said on Wednesday.

The payment of 300 million euros ($335 million) is the first of four this month totaling 1.6 billion euros from a country that depends on foreign aid to stay afloat.

Greece owes a total of about 320 billion euros, of which about 65 percent to euro zone governments and the IMF, and about 8.7 percent to the European Central Bank.

On Tuesday, Greece’s creditors drafted the broad outlines of an agreement to put to the leftist government in Athens in a bid to conclude four months of negotiations and release aid before the country runs out of money.

“If there is no prospect of a deal by Friday or Monday, I don’t know by when exactly, we will not pay,” Nikos Filis told Mega TV.

In fact, there are reports that both the ECB and the Greek government are talking about Greece going to a “parallel domestic currency”

Biagio Bossone and Marco Cattaneo write that according to several recent media reports, both the Greek government and the ECB are taking into consideration the possibility (for Greece) to issue a parallel domestic currency to pay for government expenditures, including civil servant salaries, pensions, etc. This could happen in the coming weeks as Greece faces a severe shortage of euros. A new domestic currency would help make payments to public employees and pensioners while freeing up the euros needed to pay out creditors.

If Greece defaults and starts using another currency, the value of the euro is going to absolutely plummet and bond yields all over the continent are going to start heading into the stratosphere.

That is why it is so important to keep an eye on what is going on in Greece.

But no matter what happens in Greece, it appears that we are moving into a time when there will be higher interest rates around the world.  And since 505 trillion dollars in derivatives are directly tied to interest rate levels, that could lead to a financial unraveling unlike anything that we have ever seen before in the history of our planet.

As I have warned about so many times before, 2008 was just the warm up act.

The main event is still coming, and it is going to be extraordinarily painful.

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About the Author: The Economic Collapse Blog

  • JohnDille

    YOU ARE CLEARLY A REPUBLICAN… EVEN IF YOU WOULD NEVER ADMIT IT… AND OVER THE YEARS, REPUBLICANS HAVE MADE COMMENTS THAT SHOW JUST HOW DISTRORTED THEIR VIEW OF ECONOMIC REALITY IS! GEORGE BUSH SENIOR THOUGHT THAT THE MEDIAN INCOME IN THE USA WAS A QUARTER OF A MILLION DOLLARS A YEAR… AND THAT WAS WAY BACK IN THE EARLY 1980’S!!! ACTUALLY.. BACK THEN… MEDIAN INCOME WAS MORE LIKE 15,000 A YEAR… I WOULD HAVE TO LOOK AT MY VAST DATASET TO SEE EXACTLY… BUT THAT SOUNDS ABOUT RIGHT! SO… THOSE POOR IMPOVERISHED MILLIONAIRES THAT YOU KNOW MAKE SCADS OF MONEY IN THE BOND MARKETS AND OTHER MONEY MANAGEMENT GIMMICKS?? THE SCF DATA THAT I REFERED TO THE OTHER DAY TELLS ME THAT THOSE ORDINARY PEOPLE ARE ALMOST CERTAINLY WORTH A HALF MILLION OR MORE…. WHICH IS CERTAINLY A TOTALLY DIFFERENT ECONOMIC CLASS THAN THE BOTTOM 50% OF THE US POPULATION WHO COLLECTIVELY OWN LESS THAN 2% OF THE COUNTRIES TOTAL FINANCIAL ASSETS. DOWN THERE, SOME FELLOW WITH 500 IN THE BANK IS DOING PRETTY GOOD… EVEN IF HE HAS TO TAKE IT ALL OUT THE VERY NEXT DAY TO PAY HIS RENT!!!

  • Joe Cabot

    I know plenty of non-wealthy folks that own bonds. They are part of many portfolios, not just those of the wealthy. For all of your self-proclaimed financial acumen, it is surprising how little you suddenly know when it is time for another rant. Oh, and your supposedly published economic yappings are not on the www because they were published prior to the internet? Funny stuff. I can look at untold numbers of documents that were created before there were phone lines, let alone the internet. Face it, you call it published, while the rest of us call it ranting fan letters that you sent to politicians that you were stalking.

  • JohnDille

    OVER THE PAST 40 YEARS OR SO, I HAVE HAD AT LEAST A HUNDRED ARTICLES…. OPINION PIECES MOSTLY… BUT SOME ANALYTICAL STUFF… PUBLISHED. I HAVE NEVER FOUND ANY OF IT ON THE INTERNET… MOSTLY BEAUSE MOST OF IT WAS PUBLISHED LONG BEFORE THERE EVEN WAS AN INTERNET! BUT NEVER MIND THAT… I NOTICE THAT YOU HAVE TRIED TO CHANGE THE SUBJECT… YET AGAIN! I CORNER YOU… AND YOU SLEAZE OUT… LIKE THE RIGHT WING IDEOLOGUE THAT YOU ARE! THE WORLD BOND MARKET IS HUGE… AND IS BY FAR THE LARGEST SOURCE OF REVENUES FOR MOST WEALTHY PEOPLE AND MOST FINANCIAL SERVICES COMPANIE… THT RE OWNED AND CONTROLLED BY A RELATIVELY SMALL NUMBER OF RICH PEOPLE! BUT YOU REPUBLICANS NEVER MENTION THAT HUGE FLOW OF WEALTH INTO THE POCKETS OF THE RICHEST PEOPLE IN AMERICA AND THE WORLD… AND THAT WE ORDINARY FOLKS NEVER GET MUCH OF ANYTHING FOR ALL THAT MOENY… THAT ULTIMATELY COMES DIRECTLY AND INDIRECTLY OUT OF OUR POCKETS. WHY DO YOU REPUBLICANS NEVER MENTION THAT??? OH… YEAH… BECAUSE YOUR BILLIONAIRE MASTERS DO NOT EVEN WANT YOU TO KNOW ANYTHING ABOUT THAT… SO THEY NEVER MENTION IT TO YOU!!!

  • Joe Cabot

    Yeah, we know that you are a great economist. You scream about it regularly. Too bad that your published stuff was so wonderful that it never made it beyond microfiche. I can wander around the internet and find documents, papers, and articles of varying degrees of importance, many of which are decades or centuries old. Yet your “published” economic rantings made such an impact that apparently they were deemed so important as to be left to rot.

  • JohnDille

    WELL… IF YOU HAD ACTUALLY READ MY POSTS, YOU WOULD REALIZE THAT THE FINANCIAL INSTRUMENTS YOU MENTIONED ARE TRIVIAL, RELATIVE TO THE US AND WORLD BOND MARKETS… WHICH TOTAL WELL OVER 100 TRILLION DOLLARS AND GENERATE AT LEAST 5 TO 6 TRILLION IN GROSS INTEREST INCOME FOR THE MOSTLY VERY WEALTHY OWNERS OF ALL THOSE BONDS…AND OF THE FINANCIAL SERVICES COMPANIES THAT OWN MOST OF THOSE BONDS…. EVERY YEAR… YEAR AFTER YEAR AFTER YEAR!!! ANYTHING ELSE IS CHUMP CHANGE… BUT FROM YOUR COMMENTS, I GUESS THAT YOU ARE CHUMP! SINCE I AM A VERY GOOD ECONOMIST… AN AMATUER… BUT STILL VERY GOOD…. WHY WOULD I PUT ANY MONEY INTO THE BOND MARKETS, OR INTO ANY OTHER LOW INTEREST GENERATING INVESTMENT??? I WILL LEAVE THOSE KINDS OF HIGH RISK LOW RETURN INVESTMENTS TO YOU BRAIN DEAD RIGHT WING REPUBLIANS AND LIBERATARIANS! AS FOR THE STUFF I HAVE HAD PUBLISHED… I HAVE ALREADY MENTIONED WHERE YOU COULD FND THOSE… IF YOU WANTED TO WASTE 6 MONTHS OR MORE DIGGING THROUGH HUNDREDS OF THOUSANDS OF MICROFICHE IN CITIES FAR FROM YOUR HOME TO DO SO!!! I WOULD NOT EVEN BOTHER TO DO THAT… AND I WROTE THE STUFF!!!

  • Joe Cabot

    Well, had you actually read my first post, and I’m sure you did not since you had to get to your tantrum, I did not mention bonds. I talked about CDs and money market funds, which were paying a nice return just a few years ago, and for someone who had managed to save even $100k over a lifetime this amount could generate a small return to supplement their existence. Regarding your 75 cents in passive income, that would seem to tell me that, in the past, when you have yapped about your stock market expertise and the amounts of money that you were making, that you were simply telling another lie that was convenient to the tantrum that you were tossing that day. Oh, and we are all still anxiously waiting for you to tell us where we can go to view these published economics papers from your glorious past.

  • JohnDille

    YEAH… ME AND MY WIFE MADE ABOUT 75 CENTS IN INTEREST INCOME LAST YEAR… I PUT IT DOWN AS A DOLLAR… LIKE I HAVE BEEN DOING FOR YEARS…. AND I SUSPECT THAT TENS OF MILLIONS OF WORKING PEOPLE HAVE BEEN DOING MORE OR LESS THE SAME THING…. BECAUSE INTEREST INCOME AND OTHER PASSIVE INCOME IS NOT SOMETHING THAT ACCRUES TO MOST ORDINARY PEOPLE. LESS THAN 3% OF THE US POPULATION EVEN OWN BONDS, FOR EXAMPLE, AND 80% OF THE VALUE OF THE BONDS THAT ARE OWNED ARE OWNED BY THE TOP 10% OF THE POPULATION…. OR MORE PRECISLY… BY THOSE IN THE TOP 10% WHO EVEN OWN ANY BONDS. OTHER INTEREST PAYING INVESTMENTS AE AVIALBLE AND ARE WIDELY USED… BUT THESE PROVIDE VERY LITTLE BENEFIT TO THE VAST MAJORITY OF THE PEOPLE OF THIS COUNTRY… AND WHAT MOST PEOPLE DO EARN IN INTEREST INCOME IS OFFSET BY WHAT THEY PAY. THE VERY SOLID MAJORITY OF PEOPLE IN THIOS COUNTRY PAY MORE IN MOSTLY HIDDEN INTEREST COSTS THAN THEY PAY IN TAXES… AND MOST OF THEM ARE NOT EVEN AWARE OF THAT…. BECAUSE THAT IS NOT SOMETHING THAT RICH REPUBLICANS WOULD EVER TELL US… NOW IS IT??? THEY DO NOT WANT US TO KNOW HOW MUCH MONEY WE ARE PAYING THEM… OR THAT WE GET NOTHING IN RETURN FOR THE TRILLIONS WE PAY THEM EVERY YEAR!!! ANYONE CAN QUIBBLE WITH HOW THE FEDERAL AND STATE AND LOCAL GOVERRNMENTS SPEND OUR TAX MONIES… BUT IT CANNOT BE DENIED THAT GOVERNMENT PROVIDES US ALL WITH ENORMOUS AMOUNTS OF BENEFITS. BUT WHAT DO WE GET FOR THE TRILLIONS WE PAY IN INTEREST COSTS… DIRECTLY AND INDIRECTLY… SOME VISIBLE BUT MOSTLY WELL HIDDEN… EVERY YEAR??? OH… THAT’S RIGHT… WE GET NOTHING…. NOT A DAMN THING… EXCEPT EVER RICHER AND EVER MORE POWERFUL CORPORATE REPUBLICAN TYRANTS AND PUPPETS AND PROSTITUTES… WHO BLAME THE PROBLEMS THEY CAUSE ON GOVERNMENT AND ON THE DEMOCRATS!!!

  • Joe Cabot

    Uh, comrade, plenty of non-wealthy people were utilizing a small return on their savings in order to live a simple life, yet you even begrudge them that? Oh, and whenever you yap about making some money in the market you don’t seem to have an issue with passive income. But when someone else does so you consider it evil. Seems rather hypocritical. Oh,and you are updating some data? Is this another of your tall tales. like a couple of weeks back when you were running your mouth about being a published economist, with none of this publishing being verifiable?

  • JohnDille

    WHY WOULD I CARE ABOUT THE RICH REPUBLICANS WHO ARE SUCKING THE FINANCIAL LIFE OUT OF THIS COUNTRY AND ITS PEOPLE VIA THEIR PASSIVE INCOME? PASSIVE INCOME IMPLIES THAT YOU ARE MAKING MONEY BY DOING NOTHING TO EARN IT… YOU HAVE SOME KIND OF INVESTMENT… WHICH WE CAN DEFINE TO BE ANYTHING THAT ALLOWS YOU TO LEGALLY PUT YOUR HAND IN OTHER PEOPLES POCKETS… AND TAKE MONEY OUT OF OTHER PEOPLES POCKETS, WHILE PROVIDING LITTLE OR NOTHING IN RETURN. I HAVE BEEN UPDATING SOME ECONOMIC DATA, AND THE SURVEY OF CONSUMER FINANCE STUDIES… DONE EVERY 3 YEARS SINCE 1989 BY THE FEDRAL RESERVE… PROVIDES ALL KINDS OF FAIRLY IN DEPTH LOOK AT HOW INCOME AND WEALTH IS DISTRIBUTED IN THIS COUNTRY. THOSE NUMBERS ARE APPALLING… AND THE DISTRIBUTION OF FINANCIAL ASSETS IS EVEN MORE APPALLING THAN MOST OF THE OTHER NUMBERS. THE BOTTOM 50% OF ALL THE PEOPLE IN THIS NATION LIVE IN HOUSEHOLDS WITH LESS THAN 2% OF ALL THE FINANCIAL ASSETS… AND THE BOTTOM 75% OWN LESS THAN 9% OF ALL FINANCIAL ASSETS…. AND THOSE HOUSEHOLDS MOSTLY OWE MORE THAN THEY OWN. IN OTHER WORDS, THEY PROVIDE TENS OF BILLIONS OF DOLLARS WORTH OF PASSIVE INCOME…. EVERRY YEAR….. OUT OF WHAT MEAGER EARNINGS THEY ALREADY HAVE… TO MILLIONAIRES AND BILLIONAIRES WHO GOT RICH BY BEING A BUNCH OF BLOOD SUCKING PARASITES!!! HOW CONVENIENT!!! MEANWHILE, I HAVE BEEN RE READING SOME OF MY GRAND FATHERS HISTORICAL WRITINGS, AND OTHER RELATED STUFF… AND THEY RATHER FREQUENTLY REFER TO JUST HOW IT IS THAT THE RICH REALLY GOT THAT WAY…. OFTEN BY BRUTE FORCE AND OUTRIGHT MURDER AND BLATANT FRAUD! HE AND HIS PARENTS GENERATION LIVED THROUGH THOSE TIMES WHEN THE RICH WERE STEALING WHAT BECAME THE FOUNDATIONS OF THEIR GRAT WEALTH AND ECONOMIC, SOCIAL, AND POLITIAL POWER. IT IS ALMOST AS DISGUSTING TO READ THAT STUFF AS IT IS TO READ HOW THE RICH GOT THAT WAY IN THE 200 PLUS THIRD WORLD NATIONS ON THIS PLANET! I DO NOT SEE HOW ANY RICH PERSON COULD STAND TO LOOK IN A MIRROR WITHOUT PUKING… KNOWING THAT THEY ARE WEALTHY BECAUSE THEY OR THEIR OWN DIRECT ANCESTORS WERE A BUNCH OF COLD HARD HEARTED THIEVES… AND OFTEN COLD BLOODED MURDERERS!

  • Joe Cabot

    Great point. When people were making 6% or more on their CD’s and money market funds, they were upset by the passive income and demanding that rates be lowered to 1-2%.

  • JohnDille

    THE ONLY PEOPLE HURT BY LOW INTEREST RATE ARE UPPER INCOME PEOPLE… THE TOP3% OF THE POPULATION OWN NEARLY ALL DEBT INSTRUMENTS… EITHER DIRECTLY OR INDIRECTLY! SO…LOW INTEREST RATES HELP EVERYONE BUT VERY WEALTHY PEOPLE. WHICH EXPLAINS WHY RICH REPUBLICANS ARE SO ALL FIRED UPSET WITH THE FEDERAL RESERVE, AND THE OBAMA ADMINISTRATION… WHICH HAVE EFFECTIVELY COLLUDED TO DRIVE DOWN INTEREST RATES… AND TO KEEP THEM DOWN FOR AS LONG AS POSSIBLE. AND HERE IS THE KICKER…. THE LONGER INTEREST RATES STAY LOW, THE MORE OLD HIGH INTEREST RATE DEBT EXPIRES OR GETS RETIRED OR REPLACED WITH LOW INTEREST DEBT…. SO DEBTORS CAN LOCK IN LOW INTEREST RATES FOR YERS AND EVEN DECADES TO COME…. AND THUS SAVE HUGE AMOUNTS OF MONEY IN INTEREST COSS. THE FEDERAL GOVERNMENT IS DOING THAT AS AST AS IT CAN…. AND IS LOCKING IN INTEREST COST SAVINGS OF TRILLIONS AND TRILLIONS OF DOLLARS… CORPORATE AMERICA IS DOING EXACTLY THE SAME THING… ALTHOUGH THEN THEY TURN AROUND AND USE A LOT OF THEIR BORROWED MONEY TO BUY BACK STOCK AND PAY OUT EXTRA DIVIDENDS… WHICH DEFEATS THE WHOLE PURPOSE AND DESTROYS MOST OF THE LONG TERM BENEFITS OF REPLACING HIGHER INTEREST DEBT WITH LOWER INTEREST DEBT. I WOULD STAY AWAY FROM COMPANIES THAT ARE DOING THAT… EXCEPT MAYBE TO GET IN ON THE SHORT TERM BENEFITS OF THOSE KINDS OF DEAS!!! ALSO… ONE REALLY BIG BENEFIT FROM LOWER INTEREST RATES…. IN EFFECT… MOST BORROWING IS DONE TO COVER INTEREST COSTS… THAT IS… PEOPLE AND COMPANIES AND GOVERNMENTS BORROW TO REPLACE THE MONIES THEY HAVE BEEN USING TO PAY INTEREST COSTS… SO IN NET EFFECT, MOST BORROWING SIMPLY COVERS INTEREST COSTS. ALMOST 15 TRILLION OF THE FEDERAL GOVERNMENTS 18 TRILLION DOLLARS IN TOTAL DEBT…. WAS IN EFFECT… BORROWED TO PAY INTEREST ON THE FEDERAL DEBT!!! AND SINCE THE DEBT SOARED FROM 1 TRILLION WHEN REAGAN TOOK OFFICE TO OVER 18 TRILLION TODAY, NEARLY ALL OF THAT BORROWING… TO COVER INTEREST COSTS… HAS BEEN DONE SINCE RONALD REAGAN TOOK OFFICE. AND MOST OF THE BORROWED MONIES CAME FROM…. PEOPLE WHO HAD EXTRA MONEY TO LEND TO THE GOVERNMENT BECAUSE THEY GOT HUGE TAX CUTS FRM THAT SAME GOVERNMENT!!! SO…REPUBLICANS HAVE BUILT IN AN ENORMOUS SCAM INTO THE FEDERAL BUDGET SYSTEM…. LET THE RICH KEEP HUGE AMOUNTS OF MONEY, THANKS TO THE MASSIVE TAX CUTS THEY HAVE BEEN GIVEN… THEN TURN AROUND AND LEND THE MONEY THEY SAVED BACK TO THE FEDERAL GOVERNMENT…. WHICH IS THEN OBLIGATED TO PAY INTEREST ON THE BORROWED MONIES!!! SO… JOE RICH GUY SAVES A MILLION DOLLARS IN TAXES EACH YEAR OVER THE LAST 35 YEARS… AND INVESTS IT ALL IN GOVERNMENT DEBT SECURITIES… SO HE HAS BEEN ABLE TO PARLEY HIS 35 MILLION IN TAX SAVINGS INTO A BOND AND SECURITIES PORTFOLIO WORTH AT LEAST 100 MILLION DOLLARS… AND HE PAYS LITTLE OR NO TAXES ON ANY OF THAT, IF HE DOES IT RIGHT!!! SWEET DEAL!!! NO WONDER RICH REPUBLICANS HATE DEMOCRATS SO MUCH… DEMOCRATS KEEP TRYING TO BREAK UP THAT SCAM… LIKE OBAMA AND THE FED ARE DOING RIGHT NOW…. AND ALOST NO AVERAGE PERSON IS EVEN REMOTEY AWARE OF ANY OF THIS!!! PUPPET REPUBLICANS… LIKE MOST OF THE PEOPLE ON THIS BOARD… ARE SIDING WITH THE RICH REPUBLICANS BECAUSE… WELL… WHO CAN KNOW WHAY STUPID PEOPLE DO WHAT THEY DO!!!

  • notthatGreg

    Wait, so do lower interest rates help the top 3% of people more or the “average person” more?

  • Gold Stars

    As usual people like yourself post logical and sane comments, while dilly trolls with his yelling about how the lunatic left sees the world of their own corruption!

  • Gold Stars

    Good analysis of what has been going on.
    Gifts is a kind word!
    As for the troll dilly, pay no attention to his yelling, he has issues with reality. LOL

  • What, people thought bonds could only go up forever? Another artificial crisis courtesy of the governments, banks and media ensemble. Everyone should panic, sell everything, lock in losses and transfer their wealth again to the rich.

    There is no crisis, there is no war on terror, it is all a giant conspiracy by the one world order to enslave you.

  • JohnDille

    LOWER INTEREST RATES ARE SAVING INDIVIDUALS AND COMPANIES AND GOVERNMENTS TRILLIONS OF DOLLARS A YEAR IN GROSS INTEREST COSTS…. MONEY WHICH MOSTLY GOES TO THE TOP 3% OF THE US AND WORLD POPULATIONS. THE MONEY THAT THE AVERAGE PERSON LOSES IN INTEREST INCOME IS TRIVIAL COMPARED TO WHAT HE SAVES BECAUSE HE AND HIS EMPLOYERS AND THE COMPANIES HE BUYS GOODS AND SERVICES FROM, AND THE GOVERNMENT, ARE SAVING SO MUCH ON INTEREST COSTS! AT LEAST SOME OF THOSE SAVINGS GET PASSED ON TO US ORDINARY FOLKS… AND THOSE SAVINGS ARE HUGE… AROUND 10 TRILLION JUST SINCE OBAMA TOOK OFFICE, JUST HERE IN THE USA!!! NO WONDER RICH REPUBLICANS HATE OBAMA AND THE FED!!!

  • JohnDille

    THE WORLD BOND MARKETS ARE TAKING A CLOSE LOOK AT ALL THE REPUBLICANS RUNNING FOR PRESIDENT, AND ARE PRICING IN THE RISK THAT ONE OF THOSE DIMWITS WILL BE PRESIDENT OF THE USA ONLY 20 MONTHS FROM NOW! THE MORE VIABLE THOSE RIGHT WING REPUBLICANS START LOOKING… THE WORSE THE WORLD BOND… AND STOCK… MARKETS WILL SELL OFF!!!

  • bob

    Of course rates have to go up, the current rates are unsustainable and a major drag on the economy. With rates so low the income of millions of once wealthy retirees has been destroyed.

    An increase in rates will lead to increased consumer income and eventually increased consumption. The companies at risk are the banks and lending instiutions who have lent money long term at insane rates. The winners are the borrowers who have obtained loans which are little more than gifts.