In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:
- The Crashing Treasury Curve
- Interest rates are on the move
- Get Ready For Interest Rates To Start Rising
- The end of a 30-year downtrend
- When Rates Rise, Prices Will Fall
- Bonds, stocks, housing — nearly everything
- What's Next For Bitcoin?
- We're witnessing a historical moment
Charles and Chris discuss the implications to anticipate should interest rates indeed start rising. The quick summary? It will change everything…
After 30 plus years of declining — nothing goes in a straight line forever. Bond yields aren't going to go from near 0% to -10%. Based on a reversion to the mean, a lot of people have been anticipating for years that we're close to a point at which interest rates start rising. Other people have done a lot of interesting work on demographics as a driver of inflation. In other words: these are really big trends that can't be reversed by Central Bank policies.
It's a secular shift which every investor has to think through. Individual or institutional money managers, is rotating out of whether that is at the top of its S curve and rotating into something that's at the start, the boost phase, of its S curve. In other words: buy low, sell high, and then buy low again in something else. These sectors that have been beaten up which, broadly speaking, is the entire commodity sector.
But anyway, broadly speaking, it wouldn’t surprise me if money managers