There is much much fear of inflation in the market. Keep an eye on 10 year US treasury bonds and other western counterparts. There has been a lot of dumping of 10-year US Treasuries which has been pushing up the yields. People are losing confidence in them and would rather hold onto cash. If inflation is to occur then you dont want to lock up your cash for 10 years only to get back a measly return once it matures. If nobody buys government debt then the Fed would be forced to raise interest rates to attract bond buyers.
If rates go up all those debt burdened corporations will have to either roll over their existing debt with a higher interest rate or simply pay if off. If your a company that is not really good at making money then your going to want to pay it off fast. They could downsize, lay off employees and restructure. Or they could sell the stock they have been buying back this whole time while the market is at all time highs in order to pay off the debt. This would very likely tank the stock market
The cash people get for selling their bonds will be used to buy back all the cheap stocks once the crash occurs.
There is much much fear of inflation in the market. Keep an eye on 10 year US treasury bonds and other western counterparts. There has been a lot of dumping of 10-year US Treasuries which has been pushing up the yields. People are losing confidence in them and would rather hold onto cash. If inflation is to occur then you dont want to lock up your cash for 10 years only to get back a measly return once it matures. If nobody buys government debt then the Fed would be forced to raise interest rates to attract bond buyers so they print the money to deflate the currency so inflation doesn't take off.
If rates go up all those debt burdened corporations will have to either roll over their existing debt with a higher interest rate or simply pay if off. If your a company that is not really good at making money then your going to want to pay it off fast. They could downsize, lay off employees and restructure. Or they could sell the stock they have been buying back this whole time while the market is at all time highs in order to pay off the debt. This would very likely tank the stock market
The cash people get for selling their bonds will be used to buy back all the cheap stocks once the crash occurs.
There is much much fear of rising interest rates in the market. Keep an eye on 10 year US treasury bonds and other western counterparts. There has been a lot of dumping of 10-year US Treasuries which has been pushing up the yields. People are losing confidence in them and would rather hold onto cash. If inflation is to occur then you dont want to lock up your cash for 10 years only to get back a measly return once it matures. If nobody buys government debt then the Fed would be forced to raise interest rates to attract bond buyers so they print the money to deflate the currency so inflation doesn't take off.
If rates go up all those debt burdened corporations will have to either roll over their existing debt with a higher interest rate or simply pay if off. If your a company that is not really good at making money then your going to want to pay it off fast. They could downsize, lay off employees and restructure. Or they could sell the stock they have been buying back this whole time while the market is at all time highs in order to pay off the debt. This would very likely tank the stock market
The cash people get for selling their bonds will be used to buy back all the cheap stocks once the crash occurs.