Thursday, September 4, 2008

The Slow Motion Crash

Another monster day down in the American stock market today with the Dow down over 250 points as I'm writing. The jobs numbers came out terrible once again this morning, and it will be a very interesting jobs report released tomorrow morning. With money moving out of commodities and the stock market it is heading back into the bond market for safety.

This trend is ridiculous, continuing to fuel the last great bubble left to burst in the bond market. Imagine if someone offered you a return of 2% over a two year period with inflation running at over 4% on the CPI. The real inflation numbers are close to 10%, but even if you use the faulty numbers you are losing 2% a year investing in bonds. This is very similar to buying dot com stocks that have no earnings and condos in Miami that have no renters.

A major investment brokerage that manages over $1 Billion provides a regular weekly radio program that airs live every Wednesday night. I called in last night to speak with the host regarding silver, credit default swaps, and the current bond conundrum. If you are interested in another perspective I have the link below. It is the Sept. 3rd broadcast, and I am the 3rd caller about 40% of the way through the hour long broadcast.

http://www.europac.net/radioshow_archives.asp
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