Conditions Are Much Worse Today As Yields Surge
September 2 (King World News) – Peter Schiff:  If a 4.8% yield on a 10-year Treasury seems high, during the 1970s the average yield was 7.5%. During that decade the national debt averaged about $500 billion, 1/80th of its present size. Yes, inflation as measured by the now rigged CPI was higher then, but that’ll soon change.

The average yield on 10-year Treasuries during the 1980s was 10.6%, and during the 1990s it was 6.7%. Yields should be higher now as we are a much worse credit risk given the size of our debt and the rate at which it’s increasing. So the current 4.8% yield won’t stay this low.

It’s ridiculous to claim that Treasury yields aren’t rising due to increased inflation expectations, a loss of confidence in U.S. fiscal policy, declining Fed credibility and questions over its independence, or de-dollarization, as those are the most obvious reasons for the rise.

Global Interest Rate Surge Continues
Peter Boockvar:  The bond yield momentum continues higher, most notably today in Europe with 5-7 bps moves up. The UK 10 yr gilt yield is now up 22 bps in two days to 5.28%.

The French 10 yr yield is up by the same 22 bps over the past 6 days to 4.28%. Similar moves too throughout the region. This is not because European growth is strong, it’s about 1%. I believe it’s due to worries about their large financing needs and inflation concerns that the ECB will confront with another rate increase next week all at the same time investors want to hold less long duration bonds. With the BoE, the swaps market has about a 2/3rds chance of one hike this year.

With respect to the US 10 yr yield, clearing the 4.81% would leave us with no technical resistance until we retest 5% which we touched for a day in October 2023 and something I find inevitable at this point.

The yen is getting a bid to back below 160 as BoJ board member Hajime Takata, who happens to be hawkish so maybe speaking his viewpoint rather than the committee, alluded to the possibility of hiking rates even more than 25 bps in a few weeks, maybe even 50 bps. “I can’t say at this stage whether it is .5 percentage point of 75, but as I have been repeating, the environment has changed.” I’d be quite shocked if they raised more than 25 bps but I do believe the 25 bps rate increase will be followed with further hawkish talk from Governor Ueda and that 2% is their ultimate destination with the overnight rate vs 1% today.

The 2 yr JGB yield jumped 7 bps to 1.87% on those comments, a fresh 31 yr high.

The Reserve Bank of New Zealand by the way hiked rates by 25 bps to 2.75% but as expected. Governor Breman said “It’s likely that there will be a further increase in the OCR. But the timing is highly uncertain because we will consider the effects of the two hikes that we’ve done now, and also all the new information that’s happening and how that is affecting the medium-term inflation outlook.”

Commodities Hit 14 Year High
Finally here, keep your eye on commodity prices as the Bloomberg Commodity Index (BCOM) closed yesterday at a 14 yr high.

We remain long oil and gas stocks, precious metals including platinum, fertilizer stocks as well as those producing uranium as our plays on this bull market that I believe has a ways to go.

As the cost of capital is rising along the yield curve, I do want to highlight again the spread widening that is going on at the CCC level of high yield as it now approaches the level it touched in August 2024. The spread is now 947 bps. It touched 1200 bps at the height of the tightening cycle in 2022.

Man Who Correctly Predicted Gold Would Skyrocket In 2024
To listen to Gerald Celente, who correctly predicted at the beginning of 2024 that gold prices would skyrocket, discuss what he expects from the gold market today CLICK HERE OR ON THE IMAGE BELOW.

JUST RELEASED: GOLD & SILVER!
To listen to Alasdair Macleod discuss this week’s wild trading in gold and silver and what to expect next CLICK HERE OR ON THE IMAGE BELOW.

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WHAT A WEEK: Gold Futures Hit $4,660, Silver Futures $70! CLICK HERE.
Dollar Tanks, Gold Soars, But Take A Look At This… CLICK HERE.
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