Financials Matter

"It's Not Just About Finance"

C’mon, Man! This is a Recipe for Disaster

Here’s proof that desperate governments are panicking.

I’m not sure who’ll suffer more by this recent announcement but I’m inclined to think it’s you and me.

If you missed it, last week, Austria (NOT Australia) issued a 100year bond to the tune of $3.5 Billion (Euros).

And it’s yielding a whopping 2.1%.

Let that sink in for a moment.

Investors (who won’t be around in 100 years) are willing to tie their money up for a century just to get a lousy 2.1% yield.

C’MON MAN!

You’re guaranteed to lose money on this crappy deal.

I’ll quickly prove it:

  • Interest rates are at the lowest point in history (5,000 years of history).
  • Europe (along with most Western Governments) is broke and is behaving like some desperate third world country by issuing 100-year bonds.
  • What are the chances rates will stay at these low levels?

 

The answer to that is “slim to none” … (and slim already left town).

You see, when rates go up, bond prices go down.  That’s just the way it works.

Anyone who owns these bonds will get killed when rates rise.

So, who’s buying this garbage?

Unfortunately, a lot of desperate pension funds have gobbled them up…and you’d better hope your pension isn’t one of them.

There are plenty of other desperate actions being taken by broke governments all over the world.

And it won’t end well.

Find out how to protect yourself from the inevitable failure of confidence in Governments (HERE).

It’s not a matter of “if” it will happen.  It’s a matter of “when.”

 

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