Tel Aviv, Sunday, 27th September 2009 1530 IDT.
Britannia Radio,
According to my last analysis yields on US Treasury Debt is below what would be required to compensate the investor for interest rate risk.
That yield on the 30 Years US Treasury Bonds should be above 4.60% instead of 4.09%.
It is now below the minimum yield reached before The Great Depression.
For technical reasons I expect these rates to go down as low as 3.710% and create an increase in the Greenspan Conundrum, Irrational Exuberance which will result into The Crash.
That Irrational Exuberance manifest itself on the following Markets:
- Bonds.
- Stocks.
- Minerals.
- Crude Oil.
- Precious Metals.
- Base Metals.
A random shock on the Market would cause an onset of investor precaution and would discontinuously bring the yield on the 30 Years US Treasury Bonds from 3.70% to 4.60%.
Obviously this would cause a discontinuity of the price of long-term assets: The Crash.
My bestestimate for the date of The Crash is between the next 10 Years US Treasury Notes auction, Wednesday, 7 October 1300 EDT and the close of the Market on Friday.
I am, Britannia Radio, yours sincerely,
Shalom P. Hamou
Chief Economist
My Yield Curve
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