The recent collapse of bond prices has been staggering, nearing some of the most catastrophic market crashes in US history. 10-year bonds have dropped 46% since their peak in March 2020, while 30-year bonds have plummeted a staggering 53%.
This is comparable to the 49% plunge in US stocks following the dot-com bust and the 57% dip in equities during the depths of the financial crisis.
Unfortunately, many Americans remain unaware of this economic turmoil due to limited coverage from mainstream news sources. Nevertheless, we must not ignore this escalating issue as it threatens to create serious repercussions for our financial systems.
As the 10-year Treasury yield reaches 4.8%, a level last seen just prior to the 2008 financial crisis, it is apparent that this same pattern of behavior is repeating itself.
Bond prices are decreasing as yields rise, indicating an impending crash in bonds before stocks follow suit. This development serves as a reminder of the fragility of the economy and the need for caution when investing in high-risk markets.
We have been warned time and again that high interest rates could have a devastating effect on our economy, and now we are beginning to see that reality take shape.
Banks are facing unprecedented levels of unrealized losses, with the recent increase in bond yields driving this number even higher. The situation has been compounded by the soaring mortgage rates reported by Freddie Mac’s Primary Mortgage Market Survey; the average rate for a 30-year fixed-rate mortgage is now 7.49%, up from 7.31% last week and 6.66% a year ago, while 15-year mortgages averaged 6.78%.
These elevated rates are severely hampering the housing market, leading to stagnation in many areas.
Millions of potential buyers have been forced to the sidelines, because high rates have made housing “unaffordable” in 99 percent of all U.S. counties…
Housing prices are growing more unaffordable even with the astronomical rise in mortgage rates, putting ownership out of reach for millions of Americans.
That’s according to a new report published by real estate data provider ATTOM, which examined 572 U.S. counties and determined that median home prices in 99% of those areas are out of reach for the average income earner, who makes about $71,214 annually.
“The latest trend continues a two-year pattern of homeownership getting more and more difficult for average U.S. wage earners,” the report said.
A recent sale of a 565 square foot property in West Hollywood has raised eyebrows due to its sky-high price tag. The 1924 Craftsman-bungalow, situated on a 2,240 square foot lot and tucked away behind a row of hedges just across from a fire station sold for an exorbitant $1.1 million.
This is an example of the insane home prices that we are witnessing today; it truly is mind-boggling that someone would pay such an enormous sum for a space so small.
As the sales of existing homes have declined by approximately one-third over the past year, it is evident that most homes are not selling at this time. In order for a shift in this trend to occur, either interest rates must be dramatically lowered by the Federal Reserve or home prices must decrease.
Unfortunately, Fed officials continue to discuss potential increases in interest rates; thus, an additional period of hardship may be anticipated. It is clear that the American people are becoming increasingly uneasy concerning their current financial situation.
If you can believe it, a recent Rasmussen survey discovered that more than half of all U.S. adults believe that we will experience “another Great Depression” within the next few years…
Despite claims by President Joe Biden about the strength of America’s economy, most Americans still think we’re headed toward another Great Depression.
The latest Rasmussen Reports national telephone and online survey finds that 52% of American Adults believe it is likely that, over the next few years, the United States will enter a 1930s-like depression, including 21% who say a major depression is Very Likely. Thirty-six percent (36%) don’t think another Great Depression is likely over the next few years, including 11% who say it’s Not At All Likely. Another 11% are not sure.
Most Americans can sense that something is gravely wrong, though they may not comprehend the details. Unfortunately, our failure to learn from the previous financial crisis has enabled us to create larger bubbles than ever before.
Now that bonds have plummeted, it is only a matter of time until stocks follow suit and we face an unprecedented economic collapse. The times ahead are going to be incredibly difficult; as such, it is imperative that one takes necessary precautions in order to prepare for any hardship.
We must all recognize that what many had been warning about has indeed come to pass.