CNBC: Buy Hard Assets Like Gold Ahead of a Potential Bond Market Panic, Says Bear Traps' Larry McDonald
Article by Jesse Pound in CNBC
The potential issuance of more than $1 trillion in new government debt could make commodities a smarter defensive plays than bonds, according to “The Bear Traps Report” founder Larry McDonald.
McDonald estimated that in the six months from September 1 through about February the U.S. is looking at about $1.5 trillion of new debt issuance from government. That would amount to about $600 billion more than last year, McDonald said, and the issue could be exacerbated by any delay in the tax-and-spending bill that recently passed the House of Representatives.
The idea is that the large new issuances of bonds, and the forecasts for a continuing annual deficit of the federal government, would put more pressure on a bond market that has already seen volatile moves in yields so far this year.
“We think $4 to $6 trillion is going to move from financial assets — which are .....