Dow down. Gold steady. And the ten-year T-note at 1.73%... about 20% higher than earlier this year.

Have interest rates bottomed out? It would be a major, major turning point. Nominal rates have been going down for more than 30 years. Have they finally turned? Maybe...

Every great turn is accompanied by some signal event. Could this be it?

The Financial Times reports:

'After 800 years, Cambridge graduates to bond markets.'

Cambridge University, for the first time in its history, is selling bonds. Why? Andrew Reid, finance director, explained that with 'long-term interest rates at historic lows, now seemed like a good time to borrow'.

Apparently, many Americans think so too.

'Homeowners snap up low-rate US loans,' the paper reports elsewhere.

Freddie Mac's guaranteed 30-year mortgage rate hit a record low last week, at 3.36%. Average 30-year fixed rate mortgages are going for about 3.5%.

Homeowners are taking advantage of these low rates to shore up their own finances - by lowering their monthly mortgage payments.

But they are also making what we believe will turn out to be one of the shrewdest financial moves of all time. They are taking a short position in the bond market at the beginning of a major turning point.

Interest rates will probably be trending upwards for a long, long time. If that trend has not already begun... it will almost certainly get started sometime fairly early in the life of a 30-year bond.

And when it happens, those locked-in mortgage rates of 3.5% will seem like a gift. Homeowners will make low payments... and watch the real value of their mortgage debt decline... if not disappear completely.

Want to make the financial move of a life-time, dear reader? Borrow as much as you can on your house, for as long as you can, at the lowest rate that you can get.

And get out of stocks...!

Here's what's happening. The Fed is holding the poor man's head... giving him another big shot of whiskey. Yet, the poor man can't seem to get up. He's dead drunk... and more booze won't revive his animal spirits.

What's next? Earnings have peaked out... world trade is falling... growth rates in the fastest-growing economy, China, are sinking down to 'no more than 4%' this year, says our old friend Marc Faber. And interest rates may not be rising.

Our guess is that the US stock market is getting ready to resume its march to the bottom. It began in 2007. Then, the process was interrupted by the biggest intervention in human history - both monetary and fiscal.

But the latest round of intervention seems to have lost its punch. The Fed has been jabbing and swinging for years. But last month, it came out of the corner with a real sucker punch - 'unlimited' QE3. But it can't seem to hit anything!

So, now... with the Fed neutralised... the US stock market is free to complete its rendezvous with destiny. What's that? It's where all markets go eventually - down.

They go up. They go down. After hitting record highs in 2000... and again in 2007... and again just this year... stocks are now ready to go down... down...down, until they finally reach a historic bottom. And the Fed can't stop them.

But wait. We've been wrong before. This isn't the first time we've seen the beginning of the end arrive, only to later realise that we were only in the middle. And maybe we're early again. Who knows? Stock markets - with the feds behind them - can hold off the inevitable for a long time. But not forever.

Meanwhile, our campaign for President of the United States of America is getting the coverage it deserves...

...no newspapers have asked for interviews...

...no TV talk shows have invited us to their studios...

...not even our Dear Readers have shown an interest.

Which is as it should be. We're the only candidate to have any idea of what is going on. And the only candidate to offer voters actual financial advice.

That clearly disqualifies us for high public office.

But how good is our advice? We don't know. Check back with us in 30 years. Let us know how it worked out.

Regards,
Bill Bonner
for The Daily Reckoning Australia