India Voids Bank Notes; Is the U.S. Bond Bubble Popping?

Donald Trump promises to “Make America Great Again.” Whether he can do it remains to be seen, but the Federal Reserve Note “dollar” is certainly responding to his victory. Traders began swapping bonds for dollars the morning after the U.S. elections and they haven’t stopped yet. The DXY index topped 101 on Friday – its highest level since early 2003. Beleaguered precious metals bulls are feeling the side effects. The surge in the dollar coincides with the retracement of a portion of the year’s price gains in gold and silver – although gold is still up close to 13% and […]

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Bond Bubble Bust

Rarely do we investors get a market that we know is overvalued and that approaches such clearly defined limits as the bond market now. That is because there is a limit as to how negative bond yields can go. Their expected returns relative to their risks are especially bad. If interest rates rise just a little bit more than is discounted in the curve it will have a big negative effect on bonds and all asset prices, as they are all very sensitive to the discount rate used to calculate the present value of their future cash flows. That is […]

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China’s Orgasmic Real Estate Bubble

No question about it. China definitely takes the cake when it comes to bubble creation. The government encouraged everyday people to speculate in stocks in late 2014 and 2015 to help offset the slowdown in its gargantuan real estate bubble. The stock market bubbled 160% in one year and then crashed 50% (and you can be sure there’ll be more losses to come after a year of propping up a market that has merely gone sideways…) Then to cushion that 2015 stock crash, the government made loans easier for real estate again. Bank loans surged by 7.5 trillion renminbi (RMB) […]

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Global Bond Bubble Threatens Cash Holders

As big as previous real estate and stock market bubbles have been, the current global bubble in government debt dwarfs them all. Not only is it far bigger in size and scope (some $ 60 trillion in sovereign bonds now trade globally); it is also unprecedented in character. The world has rarely seen a bond bull market that is not only 36 years old, but also shows few signs of ending. And never before in recorded history have interest rates gotten so low across the board. How much lower can interest rates go? Conventional wisdom once held that rates could […]

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The Bubble Burst You Didn’t See Coming

I keep saying that in the next great crash, everything will get swept up in the onslaught – with virtually no exceptions. And that goes too for what we eat! The 30-Year Commodity Cycle peaked in mid-2008 and has been the first major bubble to crash and burn. The CRB (Commodity) Index has been down as low as 67%, with the potential for 74% or lower in the next few years. Among individual commodities, oil has been down as much as 82% in early 2016. It looks set to revisit its late 2011 low – $ 18, or down 88%. […]

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The One Trillion Dollar Consumer Auto Loan Bubble Is Beginning To Burst

Do you remember the subprime mortgage meltdown from the last financial crisis?  Well, this time around we are facing a subprime auto loan meltdown.  In recent years, auto lenders have become more and more aggressive, and they have been increasingly willing to lend money to people that should not be borrowing money to buy a new vehicle under any circumstances.  Just like with subprime mortgages, this strategy seemed to pay off at first, but now economic reality is beginning to be felt in a major way.  Delinquency rates are up by double digit percentages, and major auto lenders are bracing […]

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The Global Real Estate Bubble Is OFFICIALY Bursting

It’s official. The global real estate bubble is bursting. After imposing a hefty 26% tax on foreign buyers, and a 12% to 16% surcharge for buyers who flipped their house between one and two years, Singapore real estate has declined 21.5%. Vancouver has taken similar measures, and – surprise, surprise – its real estate is down 24% in just five months! That’s what I mean when I say that when bubbles burst, they do so dramatically and rapidly. But this is likely just the beginning… I put Singapore into razor-sharp focus in February of last year when I noted it […]

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How to Shield Yourself From Housing Bubble 2.0

3315 Collins Avenue is one of many $ 20M+ Miami condominiums now listed around the city. The annual HOA fees for this $ 70K per square meter property are nearly $ 200,000. Waiting out Bubble 1.0 I moved to Florida in 2005, just before the housing bubble peaked. Believing that prices couldn’t remain high, we bought a smaller home than we otherwise would have. Renting would’ve been nice, but we couldn’t find a rental in a school district we liked. Home prices marched higher for six months or so, and the S&P/Case-Shiller 20-City Home Price Index reached 206. Then things slowed […]

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China’s Property Bubble Echoes Subprime Crisis

          The menacing fury of economic triggers that began piling up after the Great Recession are only getting larger and we can’t do much but watch it unfold and stay alert. I wrote about this in a letter late last year, but now here we are more than halfway through the year and it’s only getting worse. So much worse that the Chinese property bubble is now The catalyst that will reset markets will likely be one large event that cascades across the globe. I’m convinced that what finally puts an end to central banker madness […]

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Bond Bubble To Burst

Harry Dent The great commodity bubble has been steadily bursting since mid-2008, but has taken a nosedive since early 2011. It’s now down 70% overall, and 80%-plus in industrial commodities like iron ore. Real estate has seen its first bubble burst and it clearly looks like a second one is on the way. Stocks have now seen a third bubble and the largest burst is still just ahead… but, the question remains: when does it begin in this   endless realm of QE and stimulus? The bond and gold markets may give us some clues here. Look at the 10-year […]

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