Another week or two of this and panicked investors will begin paying off the national debt with negative NOMINAL interest rates!
The 10 year treasury rate plunged as much as 10% at one point this morning (1o%!!!) to 1.44%!
10-Year T-No (^TNX)
-Chicago Options
1.4740 
0.1070(6.77%)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_silv.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_gold.gif)
Boy the 10 year is tanking fast every day it drops 0.10%
Dow Now Down 201
1.44% yield should compel the Fed to start QE3 faster than what was thought. Originally, the thought was that they needed 1 Trillion in stimulus. Now I think they might need $2Trillion.
A $2 Trillion stimulus would be more than 3x larger than the first stimulus of $600 billion. People are not going to stand for negative yields forever–especially on 10-year notes.
I agree Jake,
Good chart Jake. The FED is surely on pins and needles. With the European fiasco ongoing and these numbers today, The press has to be warming up. Ugly numbers next week will probably be the ice breaker for the FED. They’ll not chance a crash right now. Spain’s bond yield dropped a little today. Back door QE perhaps. LTRO leftovers?
As loathe as I am to say this I will despite my adversity to any type of new debt. If you can refinance your home in this incredible rate environment, it is the lowest rate in the history of the Republic. Locking in these rates of 2.5-3.5% fixed for 10 to 30 years means the principal balance on your loan will immedaitely begin to evaporate with inflation that is, in reality, about 8-10%. The bank loses their butt on this transaction even though they are borrowing at ZIRP. The bank suffers—You win.
If you take some extra cash to buy silver or gold, this is even better even though it does represent leverage. But the important thing to recognize is that if you already owe on your home you arre leveraged. That will not change. What you are doing is reducing your interest rate and reducing the money you are sending to the bankster. If the price of precious metals goes up signficantly, you can use those funds to pay off a portion of your mortgage and maybe even the entire principal amount. Bear in mind that converting metals to cash has tax consequences. If the price of your stack goes up enough to manage the taxes, removing the mortgage is frosting on the cake.
This is not advice to be taken lightly or just for the sake of grinding a loan. It MUST be done in light of your overall financial plan. If you have enough home equity then converting some dead equity in your home into a other assets, like gold and silver, might be wise.. Besides which, phyzz is more portable that a home should you want to reallocate your lifestyle, if you know what I mean.
One other thought is to take advantage of credit card lines that offer -0- rate for 1 year with a modest one-time 3% charge. If you can access a line like this and stock the cash from that transaction you are borrowing at nearly -0- rate for a year. Or at least less than inflation rate. SD Bullion charges 3% for a credit card purchase If you buy with a cash advance card of 3% and don’t have to pay anything for a year, your cost of the purchase transaction still works to your advantage. In one year many things will have changed but the chances of PM being up in price is pretty good, maybe 90% or greater chance of that happening. These are just idle thoughts this AM as rates drop through the floor
German Bond Yields Turn Negative… Under Zero-Percent Returns?
Posted: June 1, 2012 at 6:55 am
You might think that record low bond yields in the U.S. and in
Europe’s safer nations would have a floor of zero percent. After all,
you cannot have a negative bond yield.
Or can you? Reports were out earlier this year that a Treasury TIPS
auction, the bonds and notes that adjust with inflation through time,
managed to go off with a yield of just under zero percent. Now we have
seen that German bund (bond) yield went under the zero-point-zero mark.
It is a scary world when interest rates go negative. Imagine going to a borrower and saying “Here take my
money and as long as you are willing to hold it I will accept slightly
less than the face amount without any interest at maturity.” That is
where we are now. <—Why Not Buy Gold or Silver–HAHAHA?
Bill Gross just warned of this yesterday in his June 2012 outlook that investors are not getting enough yield for the risk they are taking. If this does not ring true here, what does. German government bond yields went to record lows on Friday. The yield on the two-year notes
hit -0.001% at one point on Friday, and the 10-Year note went to
1.1641%.
This is the European flight to safety in maximum overdrive.
Investors are getting more and more concerned that Spain will not be
able to shore up its banks because of all their troubled housing loans,
and concerns are present every single morning that Greece is going to
leave the Euro and also that Italy is just “too big to bail.” READ MORE
Great posts Jake I thought your first Chart was upside down, Lol I still can’t understand why all these people are taking these risks in the paper market, I guess they don’t come to Doc’s site. Lol