Why Long-Term Rates are Surging - and Won't Slow Down Anytime Soon

I teach active investors how to get higher returns with less risk by learning how markets actually work.

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TIMECODES
0:00 Fed Not Forecasting Lower Rates
1:58 Why are Short-Term Yields Flat
6:09 Government Borrowing Ramping Up
7:23 The National Debt Matters
9:24 Why the Fed Would Pivot
11:35 Big Mistake Investors Make

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I am not a CPA, attorney, or licensed financial advisor and the information in these videos shall not be construed as tax, legal, or financial advice from a qualified perspective. Linked items may create a financial benefit for Heresy Financial.

[richhands]

My three favorite channels: Heresy Financial, StockBrotha, & How Money Works. Make my week complete! 🔥 🔥 🔥

[marksgoogle]

Everyone is trying to avoid hard landing but just creating longer term pain. Rates should have went much higher to make this reset happen

[robertmiller]

"There is no such thing as 'we'..." - exactly. All those things are an emergent property of those groups of individuals. It's like a forest - there is no forest but for the collection of individual trees which comprise that forest.

[damackay]

George Gammon had an interesting video a couple of days ago. It shows that, in the past, when the Fed has raised rates and everything has gone to crap, once the Fed decides to lower rates, they tend to drop them WAY down....like, down to ZERO all at once. So, expecting multiple rate drops next year isn't supported by history. Rates tend to go up the escalator, and down the elevator shaft...without an elevator car.

[citizengkar]

This is one of your best, recent videos, Joe. It has given me an ahhh moment, insomuch some of those videos now make more sense, like the direct correlation of the reverse repo facility, to the bond markets. 👍

[chargermopar]

i agree with this except for one key point. When the fed monetizes the debt and lowers interest rates why woudn't the rest of interest rates go down as they always have? The banks know they will always be baled out so why not be reckless as always?

[timber-rider]

"There are only individuals." Right on. So few get this basic concept.

[willnitschke]

The national debt doesn't matter *IF* the Fed buys it all. The damage is done when the money is spent, even if there are no longer servicing costs.

[JB-mwzt]

You’re the only yt I see commenting on how the yield curve is reverting & which end is moving. 🏆

[jshawsworld]

Other than some banking crisis, agree that reverse repo being drained is the best signal to when Fed will pivot

[omarthegreat]

So housing will continue to go higher and rate as while, no recession no home prices going down?

[Phil_]

What about the multi-quadrillion bailout of the "systemically important" banks' off-balance-sheet derivatives black holes? All this looks like peanuts in comparison, and my sense is that central banks will be happy to print that.

[jk]

Looks like they are trying to get out of their mistake.

[mannyyu]

I feel like things are different this time in so many levels. But I still appreciate your point, but I disagree with the higher for longer, since that will be the catalyst for something to break. I think we are leading into a black swan event. There are way too many things going wrong right now for us to just stick one point of observation

[jdingle]

Look at tlt. Yet stocks have decoupled from rates. Jnk holding up well. Stocks are in their own world. Maybe it will reattach to correlation with rates. But at different levels. Maybe it will reattach at previous levels. Who knows.

[georgedoolittle]

I agree with the "economic pain" point. What matters for me is that there might not be any connection between interest rates and monetary stability. So far US equities have "corrected" somewhat but coal stocks are exploding higher in price today Wednesday last week of September.

[luvit]

So...is now the time to buy EVERYTHING?

[kkiller]

Idea for a video topic: the differences between endogenous and exogenous money in the global dollar system, and how changes in both affect the general price level. "Inflation" is too broad and vague a term to be useful in my opinion, and a presentation detailing the how these two different forms/sources of currency affect prices would be very helpful.

[goodbodha]

If we make it to March without a rate drop it will be surprising at this point. Commercial real estate has a massive refi that has to happen this year. That will break banks as the borrowers will just hand the keys in. A massive rate drop will be needed for the banks to have a chance to keep borrower as a borrower. IF that loss has to be realized the banks will then have a major problem hitting their balance sheet that cant be ignored.

Game it out. If rates stay up, government interest costs skyrocket rapidly. Banks simultaneously begin to fail. Then on top of that the China real estate collapse apparently will flow into Japanese banks and that means that the Japanese banks will be pulling in capital to protect themselves. Or to put it another way Japanese investing into US Treasuries will be high and dry. They would love to get that interest rate, but they will need the money to keep themselves afloat if the loans to China are defaulting.

[SpykerSpeed]

"Higher for longer" = delaying the inevitable