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If you thought the dollar’s collapse would not affect you, think again! Here’s what’s happening:
First, U.S. bond prices are collapsing: In the two days after the Fed’s rate cut, the price of the long-term Treasury bond plunged more than two and a half points, including the worst single-day plunge since September of 2003. This means bond yields, which move in the opposite direction, have surged.
Second, if this trend continues, 30-year fixed-rate mortgage rates, which follow long-term Treasury yields, will also surge — precisely the opposite of what the Fed had hoped.
Third, all this could lead to higher mortgage rates across the board — both on the higher risk subprime mortgages and on the supposedly lower risk “prime” mortgages.
According to textbook theory, this wasn’t supposed to happen! But it is happening. Why are Treasury yields surging (and their prices plunging) even while the Fed is cutting its interest rates?
Simple: It’s primarily because of the key factor we’ve been hammering away at day after day, week after week: The U.S. dollar! It’s …
- Because foreign investors hold over $7 trillion in U.S. dollars, mostly in U.S. Treasuries …
- Because they’re taking a beating in dollars and starting to dump them …
- And because when they dump their dollars, they have to dump their U.S. bonds along with them. Heck, even before the Fed’s latest action, demand for U.S. bonds was down a staggering 80% in just one month, with the biggest selling coming from overseas.
Now, the U.S. Dollar Index has fallen well below critical support levels to within a fraction of a point of its lowest level in history and signaling even more dramatic declines ahead — just like we told you it would!
Now, gold has spiked to over $735 per ounce … oil has surged … food, water, industrial metals, construction materials and just about every other natural resource you can name is soaring in price.
None of this should come as a surprise to you — because frankly, we told you this was coming.
We even held a free Emergency Video Summit this week — The Great Dollar Panic of 2007-2008 — to help you protect yourself and profit.
And if you missed it — or need to watch it again — we’ve invited you to do so — free — just by clicking here.
But time is running out. Things are just happening too fast and I cannot keep this urgent and extremely timely information available past tomorrow at midnight. If you don’t watch it before then, you will miss it!
In it, my team and I help you save a king’s ransom as the Fed continues to gut the value of our money — and we reveal how you can use this crisis to multiply your wealth with a new investment vehicle designed to deliver substantial profits at times like these.
Whatever you do, do not invest another dollar until you get this crucial information! Just turn your speakers on and click here.
Good luck and God bless!
Martin
About Money and Markets
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Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Sean Brodrick, Larry Edelson, Michael Larson, Nilus Mattive, Tony Sagami, and Jack Crooks. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include John Burke, Amber Dakar, Adam Shafer, Andrea Baumwald, Kristen Adams, Maryellen Murphy, Red Morgan, Jennifer Newman-Amos, and Julie Trudeau.
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