Debt Market Cracks Expanding as Cycle Impact Intensifies

If you’ve been listening to the incredibly prescient, accurate, and important forecasts from my colleague Sean Brodrick and our company’s founder Martin D. Weiss lately, then you know that multiple, powerful cycles are converging in the here and now.

They warned you this event was coming here . And they just held a special online webinar to explain what impacts this cycle “convergence” will have on your investments. You can access it here if you missed it.

Still, there seems to be some confusion about where the negative impacts will be felt the most (at least at first). Turns out it’s in the DEBT market, rather than in STOCKS.

It makes perfect sense to me, and it should to you as well. That’s because out-of-control government debt … and the central banks that encouraged and enabled that boom … are at the heart of this unfolding crisis.

More importantly, the cracks in the debt market are getting larger every day. Why? Because the world’s central banks are furiously backtracking from the radical policies and promises they spent the past decade enacting and making.

Take the U.S. Federal Reserve. Policymakers convened last week, and issued a statement afterward that all but confirms we’ll see a fifth short-term rate hike at the December 12-13 policy meeting. That would raise the federal funds rate to a range of 1.25% to 1.5%.

It also comes on the heels of the Fed’s recent decision to start reducing the amount of new bonds it buys with payments it receives on old bonds. The portfolio shrinkage program started at $10 billion in October, and will grow over time.

I told you last week that the European Central Bank (ECB) is also starting to taper its own QE program. It just cut its monthly purchases in half to 30 billion euros from 60 billion. While I didn’t mention it before, the Bank of Canada (BOC) also raised that country’s benchmark rate at its meetings in July and September. It stands at 1%.

Now, the Bank of England (BOE) has joined the tightening trend. It hiked rates to 0.5% from 0.25% last week, the first such increase since all the way back in 2007. The BOE also signaled that more increases are coming in 2018 and beyond.

Wall Street muckety mucks have grown fat and happy over the past eight years, confident that central banks will backstop them forever. Governments have, too. But now we’re seeing a clear policy shift. Every single major world central bank is either raising rates, cutting QE, or both! What’s more, they’re doing so at the same time the cycle convergence my colleagues warned you about is striking with full force in the debt market.

My advice: Check out their recent webinar to see what you should expect next, and most importantly, how to protect yourself and profit from it. There’s still time … albeit not much … to take action — before these debt market cracks grow too large!

Until next time,

Mike