August 18, 2010
– Comments (7) |
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China selling more treasuries I thought would have crushed the price. Seriously, who is still buying treasuries thinking it is the best investment right now? I don't get it.
Treasuries are in a bubble right now. So until the bubble pops, the trading activity for treasuries will continue to defy fundamentals.
Price is determined by demand and supply. With demand outstripping supply, prices go up. It really is that simple.
Yeah I understand that...but why would anybody demand it?
People are afraid of other currencies more than they are afraid of US currency and they are afraid of deflation. If you are afraid of both then USTs are the things to buy.
They are going up because the govt and fed are buying their own debt... buying debt with more debt. Other countries arebuying US debt in an effort to competitively devalue their own currencies to keep their export markets viable. This race to the bottom wil end at the bottom...crash.....
Two words: Treasury Bubble
Bernanke is buying them. When he is not buying them directly, he is buying them through his favorite banksters. If I were Chinese Central Bank, I would sell to Bernanke as many treasuries as he can carry.