Danger signals in US treasuries, and signs of interest rates rising
February 06, 2009
– Comments (4)
The recent 5 yr treasury with a yield of a whopping 1.82% had the lowest bid to cover in recent memory....1.98 Also, there was an anonymous "indirect bid" to save the auction.
Recently, Germany had a failed auction.
Investors worldwide are mistrustful of governments borrowing hand over fist. And the bond markets rule.The bond markets are hinting to me of bad things to come.
With a trillion in new stimulus, almost a trillion in TARP. Let alone all of the other recent defecit spending. This truly frightens me. Tax receipts are going to be WAY down this year. The stimulus is absolute idiocy.
The government has huge unfunded current and future liabilities. We borrow 2B a day. And we keep trying to expand credit instead of savings as a solution. This worked for 20 years. But That game is over. The only job growth sector is government, which is the most ineficcient. 65 BILLION in unfunded liabilities.
The Fed is threatening to buy treasuries....how you ask? "Quantatative easing". What does that mean in laymans terms? print print print print print. Supply of money is parabolic, and velocity is nil. But calling is something other than printing will allow stealth inflation to permeate...catching people off guard. Savers are going to be screwed again.
How do you invest it?
Long gold
Long select preferred dividend stocks
Short US treasuries via RYJUX
Long energy at some point.
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