Dear Reader,
Today I want to talk about Jamie Dimon’s very big warning that came out this weekend.
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Rare signal predicts 50% market drop
The first time it flashed red was in 1929 - right before the market crashed 80%.
This second time it flashed red was in 1999 - right before the dot com crash sent the market down 50%.
And now it’s flashing red again – for the third time in history.
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Jamie Dimon is the CEO of the largest bank in the U.S., JPMorgan Chase, a serious operator and probably the best bank CEO in the country.
When he speaks, he’s one of those people you really want to listen to.
He’s a man who knows what he’s talking about.
He has really deep insight into the American economy, the bond markets, the U.S.’s relationship with China, all types of things.
He’s one of the few people you really want to listen to.
He doesn’t go public with his thoughts often, but when he does, it pays to pay attention.
He recently announced, “you are going to see a crack in the bond market. I’m telling you it’s gonna happen.”
Look for his video on this.
He goes on to say “you’re going to panic.”
I’m not going to panic.
A lot of people might blame JPMorgan Chase saying they caused the crisis and will make unfair money from it.
He says, “we’ll be fine. We’ll probably make more money,” but dismisses the idea that JPMorgan welcomes turbulence.
So, what does he mean when he says we’re going to see a crack in the bond market?
Right now, there’s this kind of mass delusion about what interest rates should be on the 30-year.
The Fed is really manipulating the long end of the market.
But there is mass delusion in the bond market as a new regime is starting to take shape.
That delusion is that anyone wants to loan the U.S. money for 30 years at 5% interest.
And it’s starting to break down.
What Dimon means by “a crack in the bond market” is basically a buyer’s strike that forces interest rates to spike.
If interest rates spike, what drives them will be the insane amount of debt spending our government has been doing, including tax breaks, since the COVID crisis.
Trump added $7.4 trillion in debt his first term.
Biden added $7.2 trillion.
And now, during President Trump’s second term, we’re on track to top both of those numbers with the budget the House passed that’s in the Senate right now.
So Dimon warns that bond buyers are going to say, “forget this.”
They’re already doing it.
Bigger and bigger groups are saying no to government bonds.
Interest rates are going to spike - especially on the 10-year. Which will crash the stock market.
Bond buyers have already forced the U.S. government to sell short-term debt.
They’re only lending the U.S. money for two, three, five years. Not 30.
They used to sell 30-year bonds no problem.
But now bond buyers are saying, “no, we don’t want your 30-year debt. We want short-term stuff. That’s how bad your fiscal policy has been - how much money you’re spending. You’re basically bankrupting your country.”
So they will only buy short-term debt.
Remember something. Short-term debt has to be refinanced every couple years.
So what happens is, let’s say we borrow $3 trillion this year.
Now, let’s say most of that is three year bonds. In three years not only do we have to refinance that $3 trillion, we have to issue an additional $2 trillion.
So you’re asking the bond market to absorb a lot.
Every time that happens, bond buyers get to raise interest rates on you.
So we’re entering a situation where it’s starting to choke us.
This is why our interest expense is over a trillion dollars a year.
We are basically spending our country into bankruptcy.
It’s astonishing - and from both parties.
You know, people say, “cut taxes. It’ll spur economic growth.”
I’ve been around long enough to see what happened when President Bill Clinton was in office.
When they were actually forced to create fiscal spending constraints.
Cutting the budget led to the nineties internet boom.
It was great.
We did fine.
And President Clinton was the last president to leave this country a budget surplus.
It’s amazing.
And now it’s like all we know how to do is spend more money.
And just like Jamie Dimon, CEO of JPMorgan Chase is warning, we’re going to see a crack in the bond market.
It’s going to happen and it’s not good.
If you haven’t seen our documentary on this and taken the down-market protections inside…
Go here to download my book for FREE and take action now to protect your family from a worst-case scenario.
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