Loading ...I’m loading the boat as soon as pre-mkt trading starts-no matter how much or little gold is up over night.
MUNI BONDS FLASHING RED LITE–THIS FAILURE BY THE REPUBLICANS MEANS POLITICAL GRIDLOCK AND NO CHANCE OF ANY TRUMP PRO-BIZ POLICY PASSING—HENCE STOCKS AND THE $ FALLS, GOLD SOARS—apocalypse now!
Mark Lundeen writes=
The above chart of best grade corporate and muni bond yields shows a historic market anomaly, an anomaly that has now gone on for 334 weeks.
Muni bond coupon payments are tax free, while corporate bonds are taxable. For this reason, yields in muni bonds were below those of corporate bonds, and with few exceptions, have always been since 1938 when Barron’s began publishing this data. Then came November 2010, and as you can see in the chart above, all that has changed.
When the Federal Reserve pushed short-term interest rates down to almost zero in 2008, people have been dying for income. Yet the market clearly prefers lower yielding taxable corporate bond income to higher yielding tax-free income from muni bonds.
This is the bond market’s warning of pending problems in the finances of local and state governments. People purchasing bonds issued by cities like Chicago, or states like California because they currently offer higher yields to corporate bonds, will one day regret holding the IOUs of the crypto-commies running the Democratic Party’s political machines.
Of course Wall Street has bundled these muni-bonds with a credit-default swap, exactly as they did with sub-prime mortgages in 2007. And we remember how that worked out. When mortgage defaults began to rise in 2007-08, Wall Street couldn’t make good on its obligations to its counter-parties to those swaps because they spent all the money instead of holding reserves. People should have gone to prison! Instead Congress and the Federal Reserve came in to bail these criminals out.
Gold is looking pretty good in its step sum chart below. Hopefully it will clear its $1,250 level next week, but if it doesn’t, I’ll just have to live with that. It looks as if its lows of last December are going to hold. But even if that doesn’t, I could even live with that too.
The key thing to keep in mind with holding gold and silver is that our world is heavily indebted by weak credits and rickety banks; and so is pregnant with counter-party risk. Gold and silver have no counter-party risks. The day is coming when trillions of dollars in flight capital are going to flee the deflating financial asset markets, and attempt to squeeze into the tiny gold and silver markets. I believe a day is coming when the price of gold and silver will rise to levels that are simply unbelievable to people today.