Derivati_Capital

Interest Rate Spikes Precede Corrections

Utbildning
Derivati_Capital Uppdaterad   
SP:SPX   S&P 500 Index
Notice the downward trend in the US10Y since the 80's, while government, corporate and consumer debt has exploded to all time highs. The achilles heel of massive debt levels are high interest rates, which end up causing slowed growth and economic contraction. With ever higher levels of debt, the level of interest required to put the economy in pain falls over time - thus why we see crashes and corrections even as the US10Y spikes to levels far below the historical average (~6.18%).

Last year we popped above the "danger zone" trend line and we saw what happened. Watch out for interest rate spikes, it can save your ass.

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This was meant to be a much longer-term chart, looks like the scaling got messed up on upload.
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Link to full-scale chart below.

i.imgur.com/prmeIWb.png
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