If there was ever a time to have a growth portfolio that gives you BOTH a powerful offense AND an impenetrable defense ... THIS IS IT!
Mere days after Obama released his 2011 budget estimates calling for the largest deficits of all time ...
Even as Washington is busy gearing up for its next record-shattering spending, borrowing and printing binge ...
The newest unemployment reports show an increase in job losses ... the Dow has plunged by over 200 points ... and the Nasdaq is down nearly 50 points. And adding to the frenzy, Moody’s Investors Services has warned that the greatest debt juggernaut in history is about to have some very serious, unintended consequences.
According to Moody’s, if Washington doesn’t slash these deficits — and fast — America’s triple-A credit rating is in grave jeopardy!This does not threaten short-term Treasuries maturing soon. But it does raise serious doubts about long-term bonds. Moreover, if the credit rating of the U.S. government bonds are suspect, imagine the disaster possible in junk bonds!
Last year, Wall Street pitchmen pawned off an all-time record of $147.7 billion-worth of junk bonds to investors ... and already this year, they’ve dumped $11.7 billion in more junk on investors in a single week. That’s another all-time record high — mostly in companies that were so close to death a few months ago.
The handwriting is clearly on the wall:
This bond market bubble is destined to burst just like the tech and housing bubbles before it. And when THIS bubble bursts, it will automatically drive long-term interest rates sky-high — pure poison for an economy in as delicate a condition as ours is now.
THIS, is the most important fundamental economic shift looming in the United States today.
The big question that remains — the one that economists can never seem to answer — is “WHEN will this fundamental shift hit the fan?
Article by Steven Weiss
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