This is a recorded livestream done today, Tuesday, May 15th, 2018, where I spoke about the spike in interest rates above 3% in terms of the U.S. treasury 10-year note yield. I answered questions from the viewers for almost an hour on a range of subjects about the markets, economics and investing.
The bond market had a big drop today and yields spiked higher as fears of rising prices and more inflation start to scare off investors. I note that I think we are moving towards an environment of economic stagnation and rising prices much like in the 1970s. This kind of environment is called stagflation. Most mainstream economists nowadays think that if the economy slows down that bond prices will go back up and yields or interest rates will come back down.
My view is that, like in the 1970s when the Keynesian economists did not foresee higher interest rates and a bond bear market during stagnant economic times, we are seeing the same kind of scenario unfold and therefore I expect financial assets to under perform precious metals and hard assets in the coming years.
