EVENTS:   IRF Lunch: Can Japan Come Good? - Pelham Smithers/Pelham Smithers Associates - 25 Jun 25   The Changing Shape of Global Growth and Where to Invest Globally - Chris Watling/Longview Economics - 01 Jul 25     ROADSHOWS: US, Europe and UK Real Estate Outlook - Hemant Kotak /Kolytics   •   Boston 24-26 Jun • Chicago 27 Jun-01 Jul • Toronto 02-04 Jul   24 - 26 Jun 25       US, EU & Asia Short Equity Ideas - Robert Prather /Vision Research   •   Dubai 18-20 Jun • Singapore 23 Jun • Hong Kong 24-25 Jun • Sydney   26 Jun 25       U.S. Financials Regs under the Trump Administration  - Ian Katz /Capital Alpha Partners   •   London   01 - 04 Jul 25      

Buckle Up for the Bond Market Meltdown

AAS Economics

Tue 17 Jun 2025 - 15:00 BST / 10:00 EST / 16:00 CET

Summary

Dr Frank Shostak and Derek Sicklen discussed the growing risk of a bond market meltdown, arguing that years of excessive money printing have eroded savings and distorted market signals, making the system fragile. They warned that central bank rate cuts are proving ineffective as investor risk aversion rises, with bond yields remaining elevated. Using an Austrian economic lens, they stressed the importance of real savings over demand-driven models and showed how their money supply indicators have successfully predicted past economic cycles. They outlined two likely scenarios—either a crisis by year-end or in 2026—both pointing to severe pressure on the bond market, with potential Federal Reserve intervention unlikely to succeed. Frank Shostak dismissed Bitcoin as a speculative mania, favouring gold as a more reliable hedge. While a modest recovery is possible, they warned that even a mild rebound could shock markets if it ends hopes of continued Fed easing.

Topics

● Growth and inflation align upwards from late 2025

● Money supply factors are driving both outcomes

● US bond market is vulnerable and likely to suffer

● Which way will the curve change?

● Liquidity is also draining from equities

● How should we allocate across stocks and bonds?

● Will this coincide with a bursting of the gold bubble?