If you needed one more reason to own chaos hedges – like gold and silver – you have it.
media is widely predicting the same thing... But the auto bulls are likely to be disappointed... Remember, we heard similar arguments when hundreds of thousands of vehicles were damaged during Hurricane Sandy in 2012. Yet the reality was a little different... the post-Sandy spike in sales was nearly indistinguishable from the seasonal spikes in other years... So yes, we could see a short-term boost in sales as vehicles are replaced. But history suggests that's all it will be. Greenspan told Bloomberg TV, "Real long- term interest rates are much too low and therefore unsustainable." And he said when rates begin rising, they are "likely to move reasonably fast." The market hasn't been this in love with government bonds in years... The last time we saw a similar extreme level of sentiment was September 2016. Back then an exchange-traded fund that tracks long-term government bonds fell 15% in just around three months. It was the same story in 2012... A 17% fall from December 2012 to September 2013 after sentiment hit similar levels. Most folks consider government bonds to be safe investments. But like anything else, buying at the wrong time can lead to serious losses. A 15% decline to end the year is completely possible. That makes U.S. government bonds an asset to avoid today. Former Fed Chair Alan Greenspan warns on bonds...
America's debt hits a new record...
Total U.S. household debt – including mortgages, student loans, credit cards, and auto loans – is now at its highest level ever: $12.8 trillion. That surpasses the previous peak of $12.7 trillion reached in the third quarter of 2008 – around the same time the last financial crisis boiled over with the collapse of Lehman Brothers. In the past year alone, Americans tacked on more than $552 billion in total debt. Credit-card debt is particularly becoming an unmanageable burden for many borrowers. It now sits at $784 billion – its highest level since the end of 2009 – and it's not far from the $866 billion peak in 2008. This debt can turn bad very quickly. Lenders with the most exposure to credit-card loans – and especially subprime credit-card loans – are in for some pain. Don't expect Harvey to save the auto industry... U.S. vehicle sales plunged again last month – hitting the lowest rate since February 2014. And sales of sport utility vehicles ("SUVs") and trucks – a longtime relative bright spot for the industry – are now slowing, too. Some readers have asked if the storm could save the industry from this trend. After all, if hundreds of thousands of vehicles were destroyed, won't that lead to big demand for new vehicles to replace them? The financial
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