Short-Term Chart of Long-Term Yields.
this is an update on our Press Release:
Quadruple Witching Hour - Chaos After the Market Crash?
http://prlog.org/
Reminder:
Government, Central Banks and Supra National bodies are now powerless against an economic downturn and even more so against a full fledged market crash. Fiscal policy and monetary policy have reached their limits.
The main indicator and trigger of a future market crash are the long term yields.
Yields of the 30 Years US Treasury Bonds:
These yields have been going down since 1981. At some point they will be so low as not to reward the investor for interest-rate risk. Sooner or later he will prefer cash at 0% interest rate rather than any lon-term investment: it is the crash.
Long-term trend of the Yields of US Treasury Bonds:
http://bigcharts.marketwatch.com/
Short-term trend of the Yields of US Treasury Bonds:
http://bigcharts.marketwatch.com/
I estimate that the fair value of that yield, given the present volatility of interest rates and the short-term rate of 0%, is around 4.60% against 3.95% now. It is already below the lowest reached before the Great Recession, which was 4.15%. It is also below the lowest reached recently during the recent market crisis I estimate that any value below 3.90% would be unsustainable and a small shock would make it return to its fair value and investors will retreat from any long-term investments.
There is no doubt in my mind that during the next four witching hour on Friday September 17th market will call the bluff.
Preparation for the Crash:
We suggest not to own any long term assets or work
(except to provide for food or shelter):
------------------> from September 09th, 2010 at 9:00 AM EST.
------------------> till September 17th, 2010 at 4:00 PM EST.
Long-Term Assets:
Long-term assets are anything which is not directed to your own day to day consumption:
The proceeds must be held either in cash or invested in short term treasuries (maturing in less than two years and held with the emitting treasuries. (With Treasury Direct for the US Dollar.)
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