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Jets vs Bills this weekend... Is this an easy game yet?
santana Icon : (Today, 12:43 PM) i'm excited for olympiakos vs dortmund
santana Icon : (Today, 12:43 PM) ill probably wear the dortmund jersey today
santana Icon : (Today, 12:45 PM) or perhaps the real madrid in dark green :D
Jetsman05 Icon : (Today, 12:45 PM) never know with the Anfield crowd but i don't really like our chances today
Jetsman05 Icon : (Today, 12:46 PM) although they are weak in defense and keeper
santana Icon : (Today, 12:48 PM) is mignolet in?
santana Icon : (Today, 12:48 PM) hes been getting a lot of flak
santana Icon : (Today, 12:48 PM) countinho was nice vs qpr though
Jetsman05 Icon : (Today, 12:48 PM) yeah Migs is in
Jetsman05 Icon : (Today, 12:49 PM) Migs great shot stopper but awful coming off his line, awful distro and awful in the air
Jetsman05 Icon : (Today, 12:49 PM) Phil has been hit or miss all season... when he's on, he's special
santana Icon : (Today, 12:49 PM) I think i saw some breakdown that he just runs out to far and then keeps his hands way too far down
Jetsman05 Icon : (Today, 12:50 PM) Balotelli and Sterling are going to have to be incredible
Jetsman05 Icon : (Today, 12:50 PM) yeah he's really poor at coming out, timing, all of it
Jetsman05 Icon : (Today, 12:50 PM) but as a shot stopper hes incredible
santana Icon : (Today, 12:50 PM) Ramos is out i believe
santana Icon : (Today, 12:51 PM) I like varane but hes doubtful also
Jetsman05 Icon : (Today, 12:51 PM) yeah Pepe and Varane at the back for Madrid
santana Icon : (Today, 12:51 PM) ITS GONNA BE GUD 05
Jetsman05 Icon : (Today, 12:51 PM) Arbeloa(LFC former player) and Marcelo
Jetsman05 Icon : (Today, 12:51 PM) nervous
santana Icon : (Today, 12:52 PM) i gotta shower then i'm running down to the bar
Jetsman05 Icon : (Today, 12:52 PM) Ronaldo rarely performed vs us at United
Jetsman05 Icon : (Today, 12:52 PM) enjoy it
santana Icon : (Today, 12:53 PM) you would like my sanctuary here in nola
santana Icon : (Today, 12:53 PM) they put the megamix on for me on the large screen
santana Icon : (Today, 12:53 PM) then i get all the individual screens with the separate games
santana Icon : (Today, 12:54 PM) ill be around on the ipad for the TOP BANTZ 05
santana Icon : (Today, 12:54 PM) i'm the only fool there drinking on tuesday/wednesday afternoons
Jetsman05 Icon : (Today, 12:55 PM) I'd knuckle up next to ya buddy. Although I do prefer being alone for LFC haha
Jetsman05 Icon : (Today, 12:55 PM) that sounds like a solid spot
santana Icon : (Today, 01:02 PM) yeah i feel that i thought more people would make it better but during the wc it filled up with filthy casuals
santana Icon : (Today, 01:03 PM) dont touch me casual! and i ran out of there
santana Icon : (Today, 01:55 PM) http://i.imgur.com/cMQ53OF.jpg
HarlemHxC814 Icon : (Today, 03:52 PM) It's so lovely to see you two getting along
HarlemHxC814 Icon : (Today, 03:52 PM) Warms my heart
santana Icon : (Today, 04:03 PM) yeah but we both decided that we hate you
santana Icon : (Today, 04:03 PM) KILL YO SELF
HarlemHxC814 Icon : (Today, 05:58 PM) 05 loves me
HarlemHxC814 Icon : (Today, 05:58 PM) I'm delightful
Jetsman05 Icon : (Today, 05:59 PM) fact
santana Icon : (Today, 07:18 PM) Yeah well titties
santana Icon : (Today, 07:18 PM) HALA Madrid
santana Icon : (Today, 07:18 PM) Big titties at that
santana Icon : (Today, 07:20 PM) http://gfycat.com/Co...ulMessyHorsefly
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Get Ready For A 'massive Interest Rate Shock' Soon Bad news for the future economy.

#1 User is offline   azjetfan Icon

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Posted 27 August 2013 - 02:52 PM

http://www.cnbc.com/...0a%20%27massive

Long story short, get ready middle class and below. This one is going to hurt. Within a year or two middle class will not be able to afford to buy a house unless you already own one. Our debt is catching up with us.


Quote

Wall Street and Washington love to spread fables that facilitate feelings of bliss among the investing public.

For example, recall in 2005 when they inculcated to consumers the notion that home prices have never, and will never, fall on a national basis.

We all know how that story turned out.

Along with their belief that real estate prices couldn't fall, one of their favorite conciliatory mantras that still exists today. Namely, that foreign investors have no choice but to perpetually support the U.S. debt market at any price and at any yield.

But, unlike what their mantra claims, the latest data show weakening demand in overseas purchases of Treasurys.
Is the economy as good as you think?


According to the U.S. Treasury Department, there was a record $40.8 billion of net foreign selling of Treasurys in June. That was the fifth straight month of outflows in long-term U.S. securities. China and Japan accounted for $40 billion of those net Treasury sales.

Those two nations are important because China is our largest foreign creditor ($1.27 trillion), and Japan is close with $1.08 trillion in holdings.

This shouldn't be a surprise to those who are able to accurately assess the ramifications from the Federal Reserve removing its massive bid for U.S. debt.

In truth, yields currently do not at all reflect the credit, currency or inflation risks associated with owning Treasurys.

If the Fed were not buying $45 billion each month of our government bonds, investors both foreign and domestic would require a much higher rate of return. Investors have to be concerned about the record $17 trillion government debt (107 percent of gross domestic product), which is growing $750 billion this year alone.

In addition, holders of U.S. debt must discount the inflation potential associated with a record $3.6 trillion Fed balance sheet, which is still growing at $85 billion each month. Also, foreign investors have to factor into their calculation the potential wealth-destroying effects of owning debt backed by a weakening U.S. dollar.


Of course, some people may claim that Japan has more debt outstanding as a percentage of its GDP than we do and yet the nation's interest rates are much lower than ours...so what's the problem?

But, unlike the U.S., Japan has a long history of deflation and only 10 percent of its debt is in foreign hands. The U.S. has not enjoyed any such history of deflation and is also a country that has only 50 percent of its debt held domestically.

Therefore, there hasn't been any real concern about foreigners abandoning the Japanese bond market because of a fear that the Yen may collapse.

But the tremendous number of foreign U.S. creditors needs to be constantly vigilant of the dollar's value. However, due to its foolish embracement of Abenomics, Japan will also have to fear a collapse of its debt market from rising inflation in the near future, just as we do here.


If the free market were allowed to set interest rates and not held down by the promise of endless Fed manipulation, borrowing costs would be close to 7 percent on the 10-year note. Let's face it, the only reason why anyone would loan money to the U.S. government at these levels is because of a belief that our central bank would be there to consistently push prices up and yields down after their purchases were made.

Our central bank has now adopted an entirely new paradigm.

Fed intervention used to be about small changes in the overnight interbank lending rate, which has averaged well above 5 percent for decades. However, not only has the Fed funds rate been near zero percent for the last five years, but also long term rates have been pushed lower by four iterations of quantitative easing.

The latest version is record setting, open-ended and massive in nature.

Since QE is mostly about lowering long-term rates, it shouldn't be hard to understand that its tapering would send rates soaring on the long end.


When the Fed stops buying Treasurys, foreign and domestic investors will do so as well. This means for a period of time there won't be anyone left to buy Treasurys unless prices first plunge.

The effects of rising rates will be profound on currencies, equity prices, real estate values and economies across the globe.

It would be wise to prepare your portfolio for a massive interest rate shock in the near future.

—Michael Pento is an economist and president of Pento Portfolio Strategies.

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