U.S Treasury

We have seen the worst bond crash in 15 years following the election of Donald Trump. Global bond investors have seen trillions of their dollars wiped out since the November 8^th result. Analysts continue to issue warnings of tough times ahead of us. The investing community believes that a Trump administration will make for much higher inflation, and investors are starting to demand higher interest rates as a result.

History shows that higher interest rates cause an economic slowdown. This makes sense, because economic activity slows when it becomes harder to borrow money. The Obama administration has already set Trump up for a major recession, but the bond crash threatens to bring it on sooner. In the bond market, bond prices fall when yields rise. A reduction in bond prices is bad news for economic growth because we do not wish to see yields rise. Yields have been soaring over the past few weeks, and the yield for a 10-year treasury note has jumped one full percentage point since July.

The 10-year yield is at a critical juncture which might cause the Fed to impose a rate increase in December. Post-election pronouncements by Fed workers have pushed the odds of a rate hike up to 98 percent. Many things in our financial system are tied to yields on U.S. Treasury notes, including skyrocketing mortgage rates. If mortgage rates continue to rise, there will be another housing crash. Other rates that will be affected include auto loans, credit cards and student loans. It will become much costlier to borrow money, which will slow down the overall economy.

Steve Bannon is determined to get a 1 trillion-dollar infrastructure plan through to congress. This will include heavy borrowing and heavy spending for a government that is already on pace to add 2.4 trillion to the national debt in this fiscal year. This all comes at a time where the U.S. economy is showing significant signs of decline. Projections show that the S&P 500 will see a sixth straight decline in year-on-year earnings. The economy has barely been staying afloat for quite some time, and it won’t take much to push it over the edge. There is not a lot of wiggle room left for bad policy.

If the economy suffers early in the Trump administration, stock prices will follow. The Obama administration has set us up perfectly for higher interest rates, a major recession and a giant market crash.

Sources:

TheEconomicCollapseBlog.com

ProfitConfidential.com

You’ve most likely heard the adage, there’s nothing certain but death and taxes. So now, President Obama and his White House minions think it’s good policy to increase the taxes when one dies. These death taxes come in two forms. The estate tax, which taxes the value of a property owned, and an inheritance tax, paid by those who inherit the property.

According to a report in Forbes, America’s current death tax rate is 40%, which is the “fourth highest rate in the industrial world.” But Obama wants to increase this to 68%, which would put America’s estate tax rate as number one in the world, even though other nations are in the process of “reducing or repealing” their estate taxes. Having the highest death taxes in the world is not a coveted position.

While Whitehouse.gov touts that what they are creating is “a simpler, fairer tax,” there’s no proof that this move will in any way help the dwindling middle class. In fact, Taxfoundation.org states that the opposite is true. Repealing the death tax could “lead to the creation of 150,000 jobs” and in time “increase federal tax receipts by $8 billion.” Sounds like something our present economy could use.

CNS News reports that death taxes are a “deterrent for leading a better life.” This is especially the case for family – owned businesses, as Obama’s new policy regulations would make it more difficult for families to use the “valuation discount” which currently in effect. If these discounts are removed, like Obama wants, a family owned business might have to be sold just to pay the taxes. This leads to job losses and the destruction of wealth accumulated over a lifetime.

Obama is not asking Congress to take up legislation on this matter. He’s bypassing them completely. And no where is there any word or hope of simplifying our lives with a flat tax. The new recommendations are already published as guidelines on the Treasury Department’s website. Comments from the public are being accepted until November 2, 2016. In addition to death taxes being increased, Obama’s Treasury Department are also looking at closing tax loopholes available in trusts.

There are many ways to destroy a nation. Decimating the hard earned wealth of families is just another notch on Obama’s belt.

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