{"id":5765,"date":"2012-03-21T16:22:09","date_gmt":"2012-03-21T20:22:09","guid":{"rendered":"http:\/\/www.pgm-blog.com\/?p=5765"},"modified":"2012-03-21T16:22:09","modified_gmt":"2012-03-21T20:22:09","slug":"are-us-treasuries-a-safe-haven","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/are-us-treasuries-a-safe-haven\/","title":{"rendered":"Are US Treasuries a Safe Haven?"},"content":{"rendered":"<div><object width=\"576\" height=\"324\" classid=\"clsid:d27cdb6e-ae6d-11cf-96b8-444553540000\" codebase=\"http:\/\/download.macromedia.com\/pub\/shockwave\/cabs\/flash\/swflash.cab#version=6,0,40,0\"><param name=\"flashVars\" value=\"browseCarouselUI=show&amp;vid=28681562&amp;\" \/><param name=\"allowfullscreen\" value=\"true\" \/><param name=\"wmode\" value=\"transparent\" \/><param name=\"src\" value=\"http:\/\/d.yimg.com\/nl\/techticker\/breakout\/player.swf\" \/><param name=\"flashvars\" value=\"browseCarouselUI=show&amp;vid=28681562&amp;\" \/><embed width=\"576\" height=\"324\" type=\"application\/x-shockwave-flash\" src=\"http:\/\/d.yimg.com\/nl\/techticker\/breakout\/player.swf\" flashVars=\"browseCarouselUI=show&amp;vid=28681562&amp;\" allowfullscreen=\"true\" wmode=\"transparent\" flashvars=\"browseCarouselUI=show&amp;vid=28681562&amp;\" \/><\/object><\/div>\n<p>&nbsp;<\/p>\n<p>Dear <strong>PGM-Capital<\/strong> Blog readers,<br \/>\nSince July 22nd 2011 we have seen investors,\u00a0driven by\u00a0fear, running\u00a0in\u00a0the wrong direction, by buying US-Treasuries as a safe haven and sending the yield of the 10-year note to a historic minimum of approx. 1.75% by early October of 2011.<\/p>\n<p>History has proven that Greed &amp; Fear will block common sense and will lead to illogical behavior of people. What also amazes us, is that people haven\u2019t learned from their mistakes from the past.<\/p>\n<ul>\n<li>In 1998 \/1999 the media was broadcasting the magic word of \u201c<strong><a title=\"THE NEW ECONOMY\" href=\"http:\/\/en.wikipedia.org\/wiki\/New_Economy\">New Economy<\/a><\/strong>\u201d in the sense that in the \u201cNew Economy\u201d Internet stocks with\u00a0<strong>NO<\/strong>\u00a0intrinsic value would<strong>\u00a0<\/strong>be the \u201cAsset Class\u201d to invest in and anything with a \u201cDOT COM\u201d behind it, was a free ticket to\u00a0a<strong>\u00a0<\/strong>great life-style\u201d and that fundamentals like Price to Earning, Price to\u00a0Book\u00a0and Price to Cash flow was something\u00a0of\u00a0the past. From August 5<sup>th<\/sup>\u00a01999 to March 10<sup>th<\/sup>2000, the tech heavy weighted\u00a0<strong>NASDAQ<\/strong>\u00a0appreciated from<strong>\u00a02,565.83<\/strong>\u00a0to\u00a0<strong>5,048.62<\/strong>\u00a0<wbr>points and then on March 11<sup>th<\/sup>\u00a02000, it was <strong>BOOM!!!!!!<\/strong>. Most of those high-flyers\u00a0of then are now either bankrupt or reduced to a small cap company. While most of the leaders that survived the crash\u00a0have been trading sideways for more than a decade.<\/wbr><\/li>\n<\/ul>\n<ul>\n<li>The same happened\u00a0in the period of 2002 \u2013 2005,\u00a0when<strong>\u00a0<\/strong>the media told the middle class that the value of their House\u00a0would\u00a0always\u00a0go\u00a0up\u00a0and advised them\u00a0to take Home Equity loans in order to buy more real estate.\u00a0<strong><a title=\"NINJA Loans\" href=\"http:\/\/en.wikipedia.org\/wiki\/No_Income_No_Asset\">NINJA<\/a><\/strong>\u00a0(No Income No Job no Assets) loans\u00a0were provided and early 2007\u00a0<strong>BOOM AGAIN\u2026\u2026\u2026\u2026.<\/strong>\u00a0The collapse of the Real Estate started and again,\u00a0similar<strong>\u00a0<\/strong>to\u00a0March 2000, charlatans told investors\u00a0to\u00a0hold on to\u00a0or even buy more Real Estate. It is fresh in our memory how this event\u00a0led\u00a0to the big crash of September 2008 \u2013 February 2009.<\/li>\n<\/ul>\n<ul>\n<li>Since the financial crisis that started in October 2008, Investors &#8211; this time based on FEAR -have been\u00a0running\u00a0in\u00a0the wrong direction again. They\u00a0are fleeing into the most risky asset, which is the US Treasury, and\u00a0in doing<strong>\u00a0<\/strong>so,\u00a0they are\u00a0creating a Hugh US-Treasury bubble<strong>,<\/strong>\u00a0which<strong>,<\/strong>\u00a0similar to those two previous mentioned bubbles, will burst. The big difference this time is that this Bond-market crash, due to the magnitude of the bond market will become the mother of all crashes.<\/li>\n<\/ul>\n<p>Please, think and think again and think logical and ask\u00a0yourself\u00a0the following question<strong>:<\/strong><\/p>\n<p><strong>&#8220;<\/strong>Will you lend\u00a0money to a country with a debt to GDP of over 100% for 10 years at a rate of 1.75%?&#8221; If you are honest with\u00a0yourself\u00a0the answer is <strong>NO!<\/strong><\/p>\n<p>If on top of\u00a0that\u00a0you are aware that the central bank of this country is printing money like there is no tomorrow, your answer will\u00a0be<strong>\u00a0<\/strong>a definite\u00a0&#8216;<strong>NO WAY<\/strong>&#8216; and you\u2019ll start selling these treasuries and flee into the only safe Haven, which\u00a0is\u00a0Gold &amp; Silver.<\/p>\n<p>Since the beginning of March of this year we are seeing\u00a0the yield on the<br \/>\n<strong>10-year Treasury bond<\/strong> is up 20% and the\u00a0<strong>2-year bond<\/strong>, which is a little more volatile, up\u00a035%, which means while everybody&#8217;s been focusing on the stock market&#8230;bonds received a hair-cut..<\/p>\n<p>So does the increase of the bond-yield of the last two-weeks signal\u00a0the begining of the\u00a0bond-market crash?<\/p>\n<p>We believe that with an election year,\u00a0the\u00a0USA FED will put the printing press\u00a0in high gear in order to maintain the yield of the\u00a010-year note\u00a0below 3% this year. Needless to say that by flooding the market with more fiat dollars,\u00a0this<strong>\u00a0<\/strong>will make the crash of the (US) Bond market even more disastrous, which will send the price of Silver and Gold to even higher\u00a0records.<\/p>\n<p>Due to this we advise investors and the middle class to exchange their paper\u00a0or<strong>\u00a0<\/strong>fiat currency for Real Money<strong>:<\/strong>\u00a0Gold, Silver, and other precious metals.<\/p>\n<p>Before following any investing advice, always take your investment horizon and risk tolerance into consideration and keep in mind that the price of Commodities, Precious metals as well as the stocks of their producers can be very\u00a0volatile and that sharp corrections may happen in the short term.<\/p>\n<p>Yours sincerely<\/p>\n<p>Eric Panneflek<br \/>\nChairman<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Dear PGM-Capital Blog readers, Since July 22nd 2011 we have seen investors,\u00a0driven by\u00a0fear, running\u00a0in\u00a0the wrong direction, by buying US-Treasuries as a safe haven and sending the yield of the 10-year note to a historic minimum of approx. 1.75% by early October of 2011. History has proven that Greed &amp; Fear will block common sense<a href=\"https:\/\/www.pgmcapital.com\/nl\/are-us-treasuries-a-safe-haven\/\">[&#8230;]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,10,19,20,15,16,1,17,32,18],"tags":[],"class_list":["post-5765","post","type-post","status-publish","format-standard","hentry","category-debt-crisis","category-eric-panneflek","category-financial-news","category-general-information","category-pgm-capital","category-precious-metal","category-uncategorized","category-us-dollar","category-video","category-world-economic-outlook"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/5765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=5765"}],"version-history":[{"count":0,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/5765\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=5765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=5765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=5765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}