A historic Treasury bond crisis has erupted and hardly anyone that doesn’t work in the financial world has any idea what is actually going on. We are literally witnessing the most dramatic financial crisis since 2008, and it isn’t even on the radar of most people in the general population. But it soon will be, because it is going to have tremendous implications for all of us. Economic conditions were very painful for several years after the financial chaos of the fall of 2008, and it appears that we are headed for a similar scenario now.
When average people on the street hear that bond yields are going up, most of them think that must be a good thing.
But bond yields and bond prices move inversely to one another, and so when bond yields are spiking that means that bond prices are crashing.
And when bond prices crash, that is not good at all.
Investors were waiting to see whether or not the yield on 10 year U.S. Treasury bonds would smash through the 5 percent barrier, and that is precisely what happened.
Subsequently, investors have been closely watching the 5.25 percent barrier, because historically that is when market conditions really begin to go haywire…
