Looking at Bonds i see the biggest bubble in my life!
Governments and even Coorporations started selling 50year and even 100year Bonds! And some of them for really low interest rates. Historically speaking all of them for really low interest rates. Clearly people were speculating that the ECB will buy them in the end as no sane person would otherwise buy debt from Spain,Ireland,Italy and definitely not for more than a year duration. To show where we are at here the 10y Bond rates: Switzerland -0,53% (jep still garanteed to loose money if you buy them) Germany 0,05% Singapore 1,86% UK 1,09% (after Brexit, whiles its currency just went from 1,50 to 1,20 to the dollar) France 0,33% Italy 1,38% (we will laugh at this in 2019) Spain 1,12% Netherlands 0,16% Portugal 3,27% Greece 8,22% India 6,75% USA 1,80% Mexico 6% Brazil 11,40% (their currency is on the verge of hyperinflating after losing half its value since 2011) So, here comes my prediction: I think that 2016 will be the highest yearly close in German Bunds. 2017 should get volatile to the downside and by 2018 German bonds should be in crashmode. The ECB cant overpower anyone else and when all Bonds worldwide start to get sold because of the second round of the Sovereign Debt Crysis not money printing will be enough to overturn all other market participants. So, 2016 the highest yearly close in German Bunds and by 2018 European Bonds will be crashing and rates rising fast. For American Bonds i think it could get interesting as if the DOW breaks out and rallies further Bonds could rise once more after a stock crash. But generally id say American Bonds have peaked. Mr. Meienberg Comments are closed.
|
AuthorPascal |