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Sunday, July 21, 2013

Municpal Bonds

Back in 2008 I wrote a very short article calling out that Municpal bonds will run into trouble. Since then I had made it part of annual predictions that the municipal bond market would have issues. The city of Detroit has now declared bankruptcy, but this is a first major US city to go bankrupt, and I expect quite a few more to follow.
I won't give timelines, apparently when there is an issue, politics can kick the can much farther than I thought possible. Detroit has been bankrupt for years, but somehow they managed to not go legally bankrupt until now.
Its a pi-polar marketplace right now.  The reality seems grim, but the markets are levating.  If municpal bonds do start to see rising rates, this could be the begining of the phase 2 of this decade journey we are on.  Contagion spreading to the government bonds, the next bubble.  
I do think gold is near a bottom, if bonds start having issues, gold may start moving quick.   I suspect we are finally seeing the gift in gold I predicted back in 2009, quote.

The gist is, I plan to ride this next wave down short the market (not short resources). I'll start looking for rolling into precious metals/resources WHEN IT LOOKS LIKE A GIFT. 

If gold and gold miners don't look like a gift right now, not sure how much lower it must go to be a gift.

Good luck.

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