{"id":9114,"date":"2013-12-28T14:52:55","date_gmt":"2013-12-28T18:52:55","guid":{"rendered":"http:\/\/www.pgm-blog.com\/?p=9114"},"modified":"2013-12-28T14:52:55","modified_gmt":"2013-12-28T18:52:55","slug":"review-of-2013-outlook-for-2014","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/review-of-2013-outlook-for-2014\/","title":{"rendered":"Review of 2013 & Outlook for 2014."},"content":{"rendered":"

\"Goodbye-2013\"<\/a>\"Welcome<\/a><\/p>\n

Dear\u00a0PGM Capital<\/strong>, Blog readers,
\nIn this year end blog edition we want to look back to 2013 and will try to provide you with an Outlook for 2014.<\/p>\n

It seems like only yesterday we were ushering in 2013. Now, the year is almost gone and a brand new year will begin in just a few days from today.<\/p>\n

INTEREST RATES:<\/strong><\/span><\/p>\n

One thing is sure: 2014 will bring with it both opportunities and dangers \u2014 and right now, it’s clear that, among the most certain opportunities, rising interest rates will become the key driver for all economic events and market movements in 2014.<\/p>\n

Since 2009, the low-interest-rate policies of western central banks, (FED<\/a>, ECB<\/a>, Bank of England<\/a> and Bank of Japan<\/a>) have inflated the ultimate bubble in bonds.\u00a0Over the past four years or so, more than US$ 1.4 trillion has flowed into US-Treasuries \u2014 nearly twice as much as the money that created the great tech stock boom of the 1990s.<\/p>\n

As can be seen from below chart, since May of this year we see a great exodus \u2014 hoards of investors beginning to stampede\u00a0OUT<\/em>\u00a0of the bond market and INTO other investments, including stocks, and soon, gold.<\/p>\n

\"Bond<\/a><\/p>\n

As can be seen from below chart, in 2013 interest rates rose from a minimum of 1.63% on May 2nd, to 3.01% on Friday December 27, 2013; an increase or 84.7 percent.<\/p>\n

\"\"<\/a><\/p>\n

Due to this some Investors will be asking themselves,<\/p>\n

“How much higher could interest rates go?”<\/span><\/strong><\/p>\n

The problem with most people is that, based on greed<\/strong> and fear<\/strong>, they have a short memory and due to this have forgotten the period of 1979 – 1985, in which the yield of the 10-year-note was above 10% and that the Ten-year Treasury rates peaked at 15.8 percent in the summer of 1981\u2014a level unbelievable in 1950 and again unbelievable now, but the reality in the aftermath of the runaway inflation of the 1970s.<\/span><\/p>\n

\"all<\/a><\/p>\n

Ladies and gentlemen, rising interest rates means plunging bond prices. We believe that due to the FED’s tapering and increasing USA Debt, even more money\u00a0will flow out of bonds and into stocks and other investments\u00a0in 2014. The problem in this, is that rising interest rates will increase the borrowing costs for business and real-estate owners. Due to this we believe that rising bond yields in the long run, will have a negative effect on the stockmarket too, as well as the real-estate market and that Gold, Silver and other precious metals, similar with the period 1977 – 1981 will be the only safe haven for investors.<\/p>\n

GOLD:<\/strong><\/span><\/p>\n