Recent sale of US treasury bonds and rising yields have led some to forecast imminent economic collapse. In this video we actually state why it could be positive and could lead to lower gold and silver prices. Join our inner sanctum:
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Today is Sunday 15th September 2019 and we are looking at the recent sell off of bonds, an increase in Government debt, and the possibility of Government refinancing over a 50- or 100-year term and how these could affect precious metal prices.
In addition, Treasury Secretary Steven Mnuchin said on Thursday, that his department is; “seriously considering” issuing 50-year bonds as soon as next year as it seeks cheaper ways to finance its massive debt load.
He told CNBC’s Squawk Box:
“This is something I have talked about over the last two years, it is something we are very seriously considering……We’re looking at issuing a 50-year bond, what we could call an ultra-long bond. We think there is some demand for it. It is something we’ll very seriously consider for next year.”
So, what are we to glean from all of this – should we be worried about a Bond sell off? Well the answer is yes and no. Yes, if the sell off is due to a lack of confidence in the economy and the dollar, and the answer is no, if its simply profit taking and re-investment back into the economy by some other means.
Now we all know that an individual cannot go on borrowing increasing amounts each year indefinitely, and neither can Governments, - but when they are a world power – they can certainly devise new methods, systems, practices and tools, not to default, but to kick that can further down the road.
If yields are beginning to rise, this will obviously have a negative impact on precious metals and especially this coming week, however issues over Iran and the drone strike on Saudi refineries will potentially have a differing effect so we have to wait and see which one achieves the greater prominence.
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