The Sovereign Bond Market

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The Solari Report – 18 Nov 10

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by Catherine Austin Fitts

Axel Merk is the author of Sustainable Wealth: Achieve Financial Security in a Volatile World of Debt and Consumption and is President and Chief Investment Officer of Merk Investments, a Palo Alto, California based mutual fund management company.

Axel is one of the clearest thinkers on the currency and bond markets today. His business places him in the daily flow of the most global, sophisticated part of the financial markets. Yet, he also has an excellent grasp on personal finance and the issues related to building and preserving family wealth.

The news in the fixed income market is confusing at best – currency wars, a falling US dollar, QE2 and threat of sovereign debt defaults. For many years, government bonds have been a safe haven for those attempting to preserve wealth. Now that is being called into question.

Current applications of modern portfolio theory tell us to assume that the future will be like the past. With significant assets being shifted to corporations and liabilities being shifted back into governments, is that a reasonable assumption? I say no, not necessarily. Portfolio theory deserves a deeper appreciation.

Should fixed income investments continue as an important part of a balanced portfolio? I would argue yes. However, navigating these markets is far more treacherous than it used to be.

That is why I am so pleased Axel will be joining us for the Solari Report this Thursday evening.

Here is Axel addressing the outlook for the Euro and quantitative easing on Bloomberg in October.

Catherine will review Money & Markets and have additional comments on trading the gold-silver ratio in Ask Catherine. Make sure to send in your questions.

Listen live on Thursday evening by phone or online, or listen at your convenience by downloading the mp3 after it is posted on Friday.

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Solari has published a special report for subscribers first on U.S. tax treatment of gold transfers, including from unallocated pools to allocated holdings. Subscribers can access the the report through the Subscriber Report Archive.

Subscribers enjoy access to our complete MP3 archive, including a special Precious Metals Market Report library so you easily identify and access all of the precious metals content. Subscribers now also receive access to all seventeen (17) Solari Report audio seminars, including Positioning Your Assets for Growth in Uncertain Times.

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This week’s Money and Markets charts will be posted at the blog.