{"id":30317,"date":"2012-06-19T01:47:57","date_gmt":"2012-06-19T05:47:57","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/06\/the-broken-bond-market\/"},"modified":"2012-06-19T01:47:57","modified_gmt":"2012-06-19T05:47:57","slug":"the-broken-bond-market","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/06\/19\/the-broken-bond-market\/","title":{"rendered":"The Broken Bond Market"},"content":{"rendered":"

By MoneyMorning.com.au<\/a><\/strong><\/p>\n

‘I believe that economists put decimal points in their forecasts to show they have a sense of humour.’<\/em> – William Gilmore Simms<\/p>\n

So, were the economists at the Organization for Economic Co-operation and Development (OECD) trying to be funny in 2011 when they forecast the Spanish economy to grow at 1.6%<\/strong> this year?<\/p>\n

Today it is contracting at 0.4%.<\/p>\n

<\/span>
\nIt’s hard to fathom this prediction when the country’s unemployment rate was already close to 20% at the time, and the country was in the middle of the worst housing bust<\/a> in Europe.<\/p>\n

Yesterday I wrote to you about Greek elections being a sideshow to the bigger economic problems in Spain and Italy<\/a>. Today the shine has already come off the Aussie stock market after the Spanish 10-year<\/a> bond yield crashed through the 7% level, to reach as high as 7.28%.<\/p>\n

This takes Spanish debt to new highs, and well into ‘code brown’ territory.<\/p>\n

So, what does this all mean for investors? I’ll show you now…<\/p>\n

The bond market<\/strong> is telling us that Spain’s economy<\/a> is close to the point of no return.<\/p>\n

Meanwhile other areas of the bond market tell us that investors are bracing for the worst.<\/p>\n

The yield on the US 10-year bond<\/a> has plummeted to 200-year lows recently, as have UK, French, German and Dutch bonds.<\/p>\n

So much cash has moved into these reputed ‘safe havens’ that investors are prepared to take a lower return on their money than anyone else in the last 200 years. And when you take inflation<\/a> into account, investors are in fact paying<\/u> to park their money in bonds. They must be pretty worried about something.<\/p>\n

The bond yields<\/a> are so low on these ‘safe haven’ bonds<\/a> now, that you could say these lifeboats are ‘full’.<\/p>\n

In that case, where else can investors park large amounts of cash<\/a> in a crisis?<\/p>\n

What about the gold market<\/a>?<\/p>\n

Dr. Alex Cowie
\nEditor, Diggers and Drillers<\/strong><\/p>\n

P.S.<\/strong> Gold is a great place to put your money if you’re looking for safety. But if you’re after quick gains, there’s a better place to put your cash to work – gold stocks. When gold is rising, gold stocks tend to rise even faster. Though, after a savage 12 month sell off, it has been a while since we have seen gold stocks rising. But they are now starting to move. I’ve recommended 4 gold stocks to Diggers and Drillers<\/em> readers, and after a rough 12 months, it finally now looks like a good time to pick up good gold stocks at fantastically cheap prices. Click here for more…<\/a><\/p>\n

Related Articles<\/em><\/strong><\/p>\n

Market Pullback Exposes Five Stocks to Buy<\/a><\/p>\n

The Problem With the Spanish Bailout<\/a><\/p>\n

There’s Good News and Better News for Gold Owners<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nThe Broken Bond Market <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au ‘I believe that economists put decimal points in their forecasts to show they have a sense of humour.’ – William Gilmore Simms So, were the economists at the Organization for Economic Co-operation and Development (OECD) trying to be funny in 2011 when they forecast the Spanish economy to grow at 1.6% this year? … <\/p>\n

Continue reading “The Broken Bond Market”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-30317","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/30317","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=30317"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/30317\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=30317"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=30317"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=30317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}