Over the past month commercial bank and foreign central bank buying, and increased borrowing by shadow banks, drove bond yields toward the low side of their range for the year.
That buying and borrowing also provided liquidity to drive the stock market rally.
While predicting how long this can last is difficult, it’s certain that it will end – and end with a thud – after buyers realize, like Wile E. Coyote, that there’s no ground beneath them.
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The rally is simply not sustainable, as the Fed relentlessly pulls money out of the system.
Constantly growing the debt at accelerating rates is called a ‘bubble’. All bubbles eventually pop. When will this fake weasel economy based on unsustainable debts go pop?