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High Long Bond Yield Good News For Gold Holders

Friday, December 10, 2010   THE DAILY RECKOGNING   By The Mogambo Guru   

The Financial Times brought up the interesting point that because bond prices are so insanely high (making bond yields so preposterously low), a one-percent change in yields would negatively impact the prices of bonds much more than a one-percent change if bond yields were higher, which I assume means in the normal 3-6% range.

Of course, this is just the simple arithmetic of relative percentage moves, and as such is of absolutely no interest to those of us who are not looking for easy math problems to solve, but only looking for the Easy Road To Riches (ERTR), which turned out to be to buy gold, silver and oil as a defense against the disastrous inflation in prices, and a Fabulous Money-Making Opportunity (FMMO) when thus capitalizing on it, when the evil Federal Reserve was massively and consistently increasing the money supply, and especially so when the evil Federal Reserve is creating more enormous amounts of new money to buy government bonds from someplace after a lot of banks, bankers and assorted middlemen get their cut, and “doubly especially so” when the purpose of the whole stinking, corrupt exercise is to finance monstrous amounts of government deficit-spending!

Read more: High Long Bond Yield Good News for Gold Holders http://dailyreckoning.com/high-long-bond-yield-good-news-for-gold-holders/#ixzz17jkbSdfK