| Editor's Note: The goal of trading is to set yourself up for financial freedom, right? But what do you do AFTER you start making money? That's what our Lead Fundamental Tactician Karim Rahemtulla is going over today at 4 p.m. ET during his FREE Big Tax Bill Training. This event will teach you how to protect your gains and reduce tax liability. It'll also reveal how a sweeping new tax change could benefit active traders like you – if you structure things right. The event is FREE and it's TODAY at 4 p.m. so make sure you sign up soon. Click here to sign up now. - Ryan Fitzwater, Publisher
Karim Rahemtulla, Head Fundamental Tactician, Monument Traders Alliance Dear Reader, Yesterday the US Treasury issued $40 billion in Ten Year bonds. Investor appetite was muted and they had to offer a higher yield to sell them all. That's bad news. It means investors are asking for more rent for their money. After-all when you buy a treasury, you are renting your money to government for a period of time. And, the higher the risk, the more rent you ask for. The auctions for short-term bills and bonds have been going well as there is less risk with less duration. But, as duration increases, so does risk and the risk for the US is not default risk, but risk of fiscal mismanagement. In other words, will the US get its deficit under control? One way to measure this is how much you are willing to charge the government to lend it money. The more you charge, the worse off you think the situation is. The government can combat this by enacting better fiscal discipline or issuing and roiling over short-term notes. But that is like taking out a variable rate mortgage instead of a fixed rate mortgage. It may look good today, but if inflation kicks in or rates don't go down, you may end up paying way more. |
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