US treasuries yield will rise as US economy fights the recession with service jobs – what is the impact on stocks, Euro and Gold?
Marla Guthrie
Dec. 9, 2006

The US economy is going though a massive change that started in eighties and now signs are clear that the momentum now is very high. The recent bulge in financial service sector especially in real estate, mortgage and investment banking will collapse with a sector wise depression.

On Friday job report, the US economy added more than 130,000 jobs. The most lost were in real estate related areas. The most job gains were from business services sector. The trend is clear now. The US will sell the world business and technical design and innovation services. The world will use these services to manufacture and consume. America will gain from cheaper products but hefty revenue from technical and business services.

The gloom and doom theory did not hold water on Friday. The Euro dropped sharply, yields on treasuries jumped. American economy looks much stronger relatively than the rest of the world. The world depression is eminent. Asia and Europe will come to realize that they cannot compete with America in high tech design, engineering and technical services because the best of world’s brains are in America. America does not want to compete in cheap labor areas that China and India can service best.

The net effect in the next ten years is booming economy in US with very strong dollar. But a lot of people will be distressed because they cannot adapt to the new highly intellectual technical world. As the economy adjusts to the new realities, a worldwide depression will be the immediate effect. Stocks will collapse, dollar will rise, and treasuries will be higher and then flat. Gold will go down in a big market. Euro Zone will be depressed as well as Asia.

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