The Everything Bubble Has Burst… Can the Fed Patch It?

Yesterday I asked, just what exactly is terrifying the Fed?

As a brief recap, there are three main issues grabbing their attention.

1)   The collapse of German banking giant Deutsche Bank (DB).

2)   China’s banking system entering a credit freeze.

3)   The bursting of the Everything Bubble.

Of the three, it is the third that is most terrifying for the Fed.

After the 2008 crisis, the Fed attempted to reflate the financial system by creating a bubble in US Government bonds, which are also called Treasuries.

These bonds are the bedrock of the current financial system. And their yields represent the risk-free rate against which all assets, stocks, commodities, mortgages, etc. are valued.

So when the Fed created a bubble in Treasuries, it was actually creating a bubble in EVERYTHING.

And last year, it BURST, when the yield on the 10-Year US Treasury broke its 30+ year downtrend (purple circle in the chart below).

THIS is what panicked the Fed.


Because if the Everything Bubble blows up, so does the entire financial system.

  • We’re talking a stock market crash worse than 2008.
  • Oil falling to $10-$20 per barrel.
  • Real estate prices falling 30%+

This is the situation the Fed is now desperately trying to stop. As you can see in the below chart, the Fed’s efforts are working… for now.

The yield on the 10-Year Treasury fell to retest its long-term trendline last month. But it has YET to break below this line.

And that’s why the Fed is panicking… talking about cutting rates an incredible 50% next week.

Something BIG is coming and the Fed knows it.

Now we do too…

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

In it, we outline the coming collapse will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.

Today is the last day this report will be available to the general public.

To pick up one of the last remaining copies…

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Posted by Phoenix Capital Research