The Federal Reserve serves as the engine that makes all of the US government’s unconstitutional spending possible. Without the Fed, the entire system would collapse.
Just consider this: in March and April of this year, the Federal Reserve effectively monetized 100 percent of the new debt taken on by the U.S. government.
A couple of weeks ago, the yield on the 10-year Treasury fell below the yield on the 2-year for the first time in 12 years. This inversion of the yield sparked recession fears in the mainstream. But in an interview with Tom Woods on Contra Krugman, former Reagan administration Office of Budget Management Director David Stockman said this is really a sign of a different problem. He said we’re actually in the mother of all bond bubbles.
Stockman said the mainstream is looking the yield curve inversion through the lens of conventional wisdom, but there is nothing conventional about the current financial situation.
Peter Schiff has said a recession is a done deal. Since he made that comment, we’ve seen more and more signs of a looming economic downturn. On Friday, we got another. The yield curve inverted, historically a sign of a looming recession.
The yield on 10-year Treasurys fell below the yield on 3-year bonds for the first time since 2007 – the cusp of the Great Recession.
Up until 1964, silver was literally money in the United States. Dimes, quarters and half-dollars were made from 90% silver. Looking at the value of these silver coins today reveals just how much the US government and Federal Reserve have devalued American money.
Gold tends to get more attention than silver, but the white metal still shines and some analysts believe it is poised to out-perform its big brother. Based on the historical silver/gold ratio, silver is currently significantly undervalued compared to gold.
So, could silver outshine gold in the wake of the next economic crisis? Analyst Dan Kurz thinks it might, and he builds the case in his latest in-dept analysis at DK Analytics.
Ten-year bond yields have hit their highest level since July 2014.
Meanwhile, the stock market has gone up about 45% since that time. Contrast that with earnings that have increased just 6%. As Peter Schiff pointed out in his most recent podcast, a lot of the justification for that increase in stock market valuation has been lower interest rates.
Well, they’re not lower anymore. They’re back exactly where they were in July 2014. But what’s more ominous is not where they are but where they’re headed.”