Where does renowned financial and geopolitical analyst Martin Armstrong see big trouble brewing? Look no further than the bond market. Armstrong explains, “The bond market is going down. . . . We’ve already started into it.
You have to understand both Japan and Europe have destroyed their bond markets. They have completely and utterly destroyed them. They are the buyers. That’s it. There is no pension fund that can buy 10-year paper at 1.3% when they need 8% to break even.
They are locking in a 10 year loss. They can’t do it. We have been helping major funds shift into equities because it is the only place they can go.
Once you start seeing the cracks in Europe, you are going to see interest rates rise faster than you have ever contemplated in your life. There is nobody in their right mind that can buy an Italian bond at 1.3%. It’s just not going to happen. Once the ECB is forced to stop, those rates are going to jump to 10% instantaneously. Once it starts to crack, that’s it, it’s gone.
What is going to make everyone know it is cracking is when you see rates going up dramatically, and the ECB is at a point it just can’t buy any more.”
- Source, USA Watchdog