December 17, 2010
– Comments (6)
This is an official bottom call for Treasuries. TLT is a buy.
I find this hard to believe. At some point a lot of people are going to notice that the dollars being produced aren't worth as much as the old ones and are going to demand a higher rate of interest. When that happens, bond prices drop.
So let me get this straight, you believe the US will experience hyperinflation, but treasuries are a buy? How on earth does that make sense?
The only way it goes up is if yields go down...why do you think that would happen? They're going up with bernanke buying bonds. Once he stops, they'll go up
The charts seem to indicate at least a short-term bottom. What do you see as the driving factors pushing treasuries higher? Do you think this is a short-term bottom? Less than 6 months or maybe less than 6 days.
For me, I would prefer to move very slowly move into TBT and/or SBND as treasuries rally. Only as a hedge on rising rates not as a large position.
I covered a third of my short treasury position this week (short TMF and TYD). Holding the rest.
The only thing I can think of that would put a bottom in Treasuries is the new Congress critters putting a tight rein on Bernanke's money-printing. I'm generally pleased with the new crop (by their rhetoric--they have *done* anything yet, of course), but have no faith that they will have real control over government spending with control of only half of the legislature and not the executive.
As long as Ben prints, Treasuries will go down. More dollars dilute the value of all dollars. Simple supply and demand, augmented by growing loss of faith in the central bank's self-control.