Acccording to Martin D. Weiss, Phd., when the bond market bubble busts, the inevitable and immediate consequence is that interest rates surge — not only on bonds, but also on mortgages, auto loans, business loans, and almost every kind of financing imaginable.
If you hold fixed-income investments locked in at today’s low interest rates, you will almost definitely get hurt, regardless of what kind you own — Treasury bonds, Ginnie Maes, municipal bonds, mortgage bonds, corporate bonds, long-term bank CDs.
Either …
You’ll get stuck with miserable, below-market yields for years to come, or …
You’ll have to pay a tremendous price — losses in principal and/or stiff penalties — to switch to higher yielding investments.
At least consider selling your longer term investments while you can still get a small premium.
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