We have been in a bear market this year for both stocks and bonds. But what will actually happen once it comes to an end? A lot of people are simply expecting that interest rates are going to go back down like they always have in the past, but we are now in a time of systemic inflation that has not been seen in the United States since the 1970’s. It is really unrealistic to think that interest rates are going to go back down to zero ever again. In fact it is doubtful that inflation is going to go back down to 2% in the next few years too. People just think these things will happen as they assume that the Federal Reserve is in control.
But what if that is an illusion? What if the Federal Reserve is simply raising rates to follow the action in the bond market? What if after the stock market bear market ends that yields barely go down at all and if bonds actually end up falling more instead of going up as people simply assume? What would be the best way to be positioned for that? I’d suggest gold and silver would become necessary things to own in a portfolio in such a situation.
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-Mike
