Watch US Treasury MarketMy Comment: Congress is on deck yhis week with the government scheduled to run out of funding on 11/17. It's too late to address the US fiscal debt which will explode higher in the next recession and will result in higher long ter rates (ie a debt spiral)
Gold prices can run $700 higher as the U.S. faces a debt spiral - Jess Felder | Kitco News Excerpts:
“The Federal Reserve keeps saying that interest rates will have to be higher for longer, but as a result, we are starting to see problems in the Treasury market,” Felder said. “We are going to see more signs of financial instability with more volatility in Treasuries.”
Felder added that conditions will be ripe for gold when the U.S. unemployment rate starts to increase and as recession fears begin to build, bond yields move higher instead of lower.
He pointed out that it is inevitable that yields will continue to rise because the U.S. government is in no condition to provide any fiscal support when the economy eventually falls into a recession.
“The size of the U.S. debt and rising deficit will make this recession different from the others. Anything the government will do will only widen the liquidity hole in Treasury markets. This is how a debt spiral begins,” he said. “Over the next few quarters, investors are going to realize that this fiscal problem isn’t going away and will eventually turn to gold.