Signaling

Recession?

DYI:  Since the real estate downturn of 2008 stock yield have been greater than two year Treasury notes but just of late they have once again inverted with stock yields at 1.79% and 2 year T-notes at 2.21%.  As it states in the above chart; should we worry?  The best answer so far is “I don’t know.”  Here is what I do know there are 5 possibilities.

1. Prosperity
2. Deflation
3. Inflation
4. Recession
5. Doesn’t mean a damn thing

My best guess out of all them is an upcoming recession.  This economic recovery – what little there was – has been on track since March of 2009.  That is a long time.  I don’t believe for a second the Fed’s, whether our central bank or Federal government in some way repealed the business cycle.  For long term investors as opposed to market trader’s stocks and long term bonds are overinflated way beyond their respective means – so much so – DYI’s formula has kick us out of both of those asset categories and rightfully so!

Hold onto your hats and your cash better values are ahead!

DYI