Jim Cramer sees two large macro-economic themes at work that are having major impact on the U.S. economy currently. First is oil, which he has covered endlessly since it began the rapid decline. The second is the nosedive in yields for the U.S. Treasury bonds, which could prove to be a big deal for the economy.
As a review, when the price of a Treasury goes up, the interest rate goes down, and vice-versa. The foreign economic landscape has been treacherous as of late, thus money has been flooding into U.S. Treasurys as investors seek financial security.
It makes sense, right? Wealthy investors want to take their money out of weaker economies, and are pouring it into the U.S. dollar and U.S. bonds. After all, the U.S. has the strongest economy with a strong currency and investors want to secure their money.
The result of the incoming flooding of foreign money has sent Treasury prices higher, and interest rates lower.
How long can this rally really last, and how low can interest rates go?