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Rapid Rise In Interest Rates Will Collapse U.S. Financial System – Here’s Why

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Lorminer Wilson * Munknee

There is one vitally important number that everyone needs to be watching right now, and it doesn’t have anything to do with unemployment, inflation or housing. If this number gets too high, it will collapse the entire U.S. financial system. The number that I am talking about is the yield on 10 year U.S. Treasuries. Here’s why.

So warns Michael Snyder (theeconomiccollapseblog.com) in edited excerpts from his original article* entitled The Most Important Number In The Entire U.S. Economy.

[The following article is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here – register here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]

Snyder goes on to say in further edited, and in some instances paraphrased, excerpts:

Here’s why: when the yield on 10 year U.S. Treasuries goes up,

  • long-term interest rates all across the financial system start increasing…
  • it becomes more expensive for the federal government to borrow money,
  • it becomes more expensive for state and local governments to borrow money,
  • existing bonds lose value and bond investors lose a lot of money,
  • mortgage rates go up and monthly payments on new mortgages rise, and
  • interest rates throughout the entire economy go up and this causes economic activity to slow down.
  • On top of everything else, there are more than 440 trillion dollars worth of interest rate derivatives sitting out there, and rapidly rising interest rates could cause that gigantic time bomb to go off and implode our entire financial system.

Rising Interest Rates

We are living in the midst of the greatest debt bubble in the history of the world, and the only way that the game can continue is for interest rates to stay super low. Unfortunately, the yield on 10 year U.S. Treasuries has started to rise, and many experts are projecting that it is going to continue to rise.

continue article at Munknee:

http://www.munknee.com/will-collapse-the-entire-u-s-financial-system/



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    Total 3 comments
    • Anonymous

      Obamas great economy
      His hope and change is to print 85 billion a month. That’s the plan and that’s all he has.

      Hold on to you hats boys we are in for a wild ride in the years ahead.

      • Gary Anderson

        The Fed is a private bank. Wouldn’t matter who is president.

    • Gary Anderson

      Of course interest rate swaps would tank, since the banks have bet on low floating side of the bet and forced the borrowing companies to take the high interest rate side of the bet.

      So, either interest rates won’t rise that much, or if they do there will be bail ins, where the banks take depositor assets and turn them into capital for the banks.

      Either way, the bankers are in control.

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