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Fed Chairman Bernanke has thrown the kitchen sink at the bond markets to keep interest rates down.
He’s shoved the Fed Funds rate down further — and kept it there longer — than any U.S. Fed Chairman of modern times.
He’s printed more money than any central banker since the Weimer Republic.
He’s bought more bonds than anyone in all of recorded history.
And he’s even tried to give the markets an extra bonus this month by promising to continue buying bonds despite the market’s expectations that he was about to taper his bond-buying extravaganza.
In sum, he’s done many times more than any money-printing madman since the founding of the Republic — all with the explicit purpose of pumping up bond prices and hammering down their yields!
So you’d expect that, with all these record-smashing Herculean efforts, he could have beaten bond markets into submission.
Not so!
Since July 24, 2012 — 14 months and 4 days ago — his entire operation has been misfiring and backfiring.
Bond prices have gone DOWN instead of up.
Long-term interest rates have gone UP instead of down.
And tens of thousands of bond investors around the world have been defying the Fed Chairman like a growing flock of mocking birds.
This isn’t just monetary theory. It’s a fundamental, real-world failure by the Fed to pass a simple smell test.
Nor is it subtle. You can see it for yourself, plain as day, in the chart at the top of this page.
Sure, some bond investors breathed a temporary sigh of relief two weeks ago when they learned Bernanke was going to continue his bond buying bonanza for a while longer.
But now, even that relief is fading, as interest rates have turned sharply higher again.
Our advice: Don’t let anyone — the Fed OR the bond markets — make a mockery of your financial future.
Keep most of your money safe. Stash it in short-term instruments that are not vulnerable to falling bond prices. Then, when we give you the signal that rates have reached a peak, be ready to lock in some of the best yields in decades.
Good luck and God bless!
Martin
Dr. Weiss founded Weiss Research in 1971 and has dedicated his entire career to helping millions of average investors find truly safe havens and investments. He is Chairman of the Weiss Group, which includes Weiss Research and Weiss Ratings, the nation’s leading independent rating agency accepting no fees from rated companies. His last three books have all been New York Times Bestsellers and his most recent title is The Ultimate Money Guide for Bubbles, Busts, Recession and Depression.
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Pres Obama must reverse direction from the last two Federal Reserve Chairmen, Alan Greenspan and Ben Bernanke.