T-Bonds have been treading water since Trump took office, His eagerness to stimulate growth with a gusher of fiscal spending and consumer credit has increasingly weighed on fixed-income markets. However, this has been more or less offset by the President’s ability to attract buyers of Treasury debt from outside the U.S.  The chart says this precarious balance is about to end with a fall in bond prices and a corresponding rise in long-term yields. At a minimum, TLT is headed down to the red line, a midpoint Hidden Pivot support at 78.05. If yields on the long bond were to rise commensurately, they would hit 5.33%, up from a current 4.79%.

This might not seem like much, but it would squeeze the last breath from a consumer economy already suffocating from debt fatigue and persistent inflation. The already shaky housing and auto sectors would collapse, presumably led by a stock market that is filled mostly with hot air. Nor are there any guarantees that the red line on the chart will hold. If it doesn’t, and TLT falls to the next logical plateau at 62.23, the damage this would do to the U.S. economy and to our way of life is distressing to imagine.

Any spike in rates would be short-lived, since it would quickly deflate the economy into deep recession. Since this would be fundamentally a deleveraging event, investors should not be looking for opportunities at this moment; rather, they should secure their capital in safe-haven assets such as Treasury paper, bullion and utility companies with strong dividend histories. The burgeoning healthcare sector’s ability to withstand hard times is not a given, since it thrives now only on the illusion of prosperity.