Monday, April 26, 2010

Rising Rates Right Around the Corner--Take Precautions

From Martin Weiss Research. If you haven't gotten out of bonds, refinanced the house, or moved your outstanding credit car debt to lower-interest cards (or paid it off completely), now's the time!

1. The budget deficit is out of control.

2. Treasury bond supply is exploding, meaning they sell every denomination every chance they get.

3. U.S. debt risk is surging--we may finally lose our AAA status (which really isn't AAA at all--more like D).

4. The Fed is running amok. Loose monetary policy will be with us for some time, encouraging fast-and-loose monetary activities, and leaving banks to put on the brakes for consumers.

5. Inflation is simmering again. Commodities are rising quickly, the PPI (producer price index) is rising, and inflation is coming courtesy of resources and suppliers instead of banks.

"...if inflation really gets out of control, we could get back to the double digits. That’s the least likely scenario, but not completely out of the realm of possibilities.

Bottom line: We’re going to have to pay the piper for our profligacy as a nation, and I believe the bill will come due sooner rather than later."

Want to make this trend pay off for you? Dump your U.S. bonds and go for foreign bonds not involved with this Euro-U.S. meltdown/bailout cycle (like Pacific countries), and/or jump on the commodities and energy bandwagon--go with what's inflating.


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