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Situation Critical -- Alan Greenspan Is Warning Of Debt Bubble Bursting! (Video)

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***Situation Critical*** Alan Greenspan Is Warning Of Debt Bubble Bursting!

 

19 Aug 15

 

**Greenspan warns about bond-market bubble. STAY AT THE READY! We’re not playing here….

 

Greenspan warns about bond-market bubble

Former Federal Reserve Chairman Alan Greenspan is sounding the alarm about a bubble that he believes is forming in the bond market.

In two television interviews in recent days, Greenspan said interest rates could shoot higher and derail the economy when the bubble bursts.

The former Fed chairman says the current situation in the bond market is comparable to what happens in the stock market during an equity bubble.

Noting that stock-market bubbles are typically characterized by extreme price-to-earnings ratios, Greenspan said extremely low yields are telling a similar tale for bonds.

“If you turn the bond market around and you look at the price of bonds relative to the interest received by those bonds, that looks very much like the usual spread which would concern us if it were equities, and we should be concerned,” Greenspan said in an interview with Fox Business Network.

In an earlier interview with Bloomberg Television, Greenspan said it was appropriate to be very afraid of the bubble. He said the bond market price-to-earnings ratio was at an “extraordinary unstable position.”

Greenspan said “normal” interest rates have always been in the 4% to 5% range.

Yields on the 10-year Treasury TMUBMUSD10Y, -3.05%   have been below 4% since the summer of 2008. The yield is up slightly to 2.217% in Wednesday morning’s trade.

TimeU.S. 10 Year Treasury Note20062008201020122014

 
BX:TMUBMUSD10Y
1%2%3%4%5%6%

“We have pressed the interest rates well below normal for a protracted period of time and the danger is they will come up to back up to where they have always been,” the former Fed chairman said.

“There are two possibilities. Either we move slowly back to normal, or we do it in a fairly aggressive manner. History tells us it’s the latter which tends to be more prevalent than the former,” Greenspan said.

The market impact will be “not good,” he said.

In an interview with MarketWatch last year, Greenspan said that when bubbles emerge, they take on a life of their own. READ MORE

#money #economy #bonds 



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    Total 4 comments
    • LITTLE LORD FAUNTLEROY

      THE ONLY BONDS WORTH TRADING AFTER THIS LITTLE FIASCOE WIL BE 007 BOND

    • Busta Myth

      Oh Gee, its close to Poppin time again

      who on Earth could have seen that one coming out of the blue? :lol:

    • Anonymous

      Another word for pyramid scheme
      And he didn’t know that it was a crime against humanity.
      Hillary did it.
      Look at the harmless bubble bursting. Bill

    • sarah

      Is this where we stick our heads between our legs and kiss our @ss goodbye?

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