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Valyooo (99.63)

What caused the 30 year treasury bull market?

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May 22, 2013 – Comments (12) | RELATED TICKERS: TLT , IEF , TBT

From 2000-now , it seems like mostly a risk rotation reason and especially post 2008, as central banks tried to lower rates due to crappy economy.....but what about 1981-2000?  When the economy was raging and same with stocks, why were rates going down constantly as the market was going up?

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#1) On May 22, 2013 at 7:20 PM, Valyooo (99.63) wrote:

My guess would be that since the debt kept growing, foreign banks had to so something with all their dollars, so they bought treasuries with them.  Seems that the bull is unlikely to change until America becomes export driven

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#2) On May 22, 2013 at 7:56 PM, L0RDZ (84.26) wrote:

30 year  bull  market  in   treasury  bonds ???

I guess its all  a matter  of  perspective  ?

I  remember  back before  the  crisis  when  I  dealt  with  high risk  persons  wanting  items  for  their  homes  and  seeing plenty of  these people  having  10%  home  loan rates  on   condos  and  they were  lucky  to  get  said  high  rates  to  acquire  places.

Than  during  the  housing  over-heating bubble  in  which  gov  idiots  like  that  former  brain  damaged sounding  Barney  Frank  were  enacting and  forcing   loaners  to  give  loans  to any and  everybody  so  as  to  be  able  to  acquire  ever increasing home.

But it all  was  illusionary and  based upon  securitized  loans   to any  and  every body.

Hell  people  on assistance and formerly  on  assistance were  being  approved  for  millions of  dollars  to  acquire multiple  properties.

Than  the  bubble  started  to  but  didn't  yet pop  despite  all the  hatred  toward  a  certain   resident  of  the  US  with the last name of  a  brand  of  beer.

I  remember  the  utter hatred  and  the throwing  of  monkey wrenches  into  helping  to   begin  what  was  to  become  the  worst  recession  slash  depression  of  which  we still  are  feeling.

Demi-rats  and  their  counter-part   have  much  to blame  for  what happened.

But  as  the  victors  rewrite  history  and  spin  it...   only  those  who  lived  thru  it  and  saw  it  coming  can  laugh  when  we  see  educators  try  to  explain  the  stupidity  and  corruption in the system.  Of  course its much easier to just say  its  Bush's  fault  or  this  other person  ~~~  that  community organizer ~~~  LMAO.

 

 

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#3) On May 22, 2013 at 7:59 PM, Valyooo (99.63) wrote:

The price of treasuries have been increasing for 30 years....the yield has been falling...thats all there is to it....perspective has nothing to do with it

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#4) On May 22, 2013 at 8:14 PM, L0RDZ (84.26) wrote:

Yeah  but  Valy   when  you  have  one  portion  of  the gov-,ment  buying  what  another  part  is  selling   and  the  gov-ment  gets  the benefit  of  reducing  its  costs  to  fund  itself...

Its  kind of  like  starting  a  fire  only  to  be  the first one  to show up and  be  labeled  a  hero  for  helping  to put it out.

Imagine  if  half  the  fire dept  went  around  starting  fires  so  that  they and  or  there  buddies  could  be  called to  get on  scene and  look  kewl  fighting  them,   if  you didn't  know  they started  the  fire  your  perspective  might  be  different...   than had  you  seen  them just  moments  before  actually  starting  the fire.

 

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#5) On May 22, 2013 at 9:22 PM, jiltin (22.22) wrote:

Valyooo, you said "My guess would be that since the debt kept growing, foreign banks had to so something with all their dollars, so they bought treasuries with them".

After 1973, Dollar is made as international trade currency rather than gold. Foreign banks wants to stability and growth. If they keep their money at their local notes, likely get devalued and they do not get any returns.

If the keep it at US treasury, there money value is stable and they also get treasury yield. Pre-1973, they used by gold and keep it as reserve. After 1973, the best way is to go for treasuries.

 

 

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#6) On May 22, 2013 at 10:55 PM, Valyooo (99.63) wrote:

L0rdz what is your point?  Treasuries were in a bear market for years before that. Sometimes theres a bear sometimes its a bull...I do not care if it is corrupt, I know it is, I just want to make money

 

jitlin, what about between 1973 and 1982? 

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#7) On May 23, 2013 at 2:11 AM, jiltin (22.22) wrote:

Frankly, I do not have answer for 1973 and 1982. I do not want to mislead. My knowledge is limited from 1995 onwards, by the time I came to US. 

Recently, I read this from some article "Why Japan and China are buying US treasuries" rather than gold.  

They do have gold reserve. But they also invest in US treasuries. These two countries are major treasuries holder.

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#8) On May 23, 2013 at 9:10 AM, ETFsRule (99.94) wrote:

Well, in 1981 yields were ridiculously high due to high inflation from the oil crisis. So they were bound to come down. I think the entire period of 1981-2000 can be explained just by yields coming down to a normal level as people calmed down about inflation.

In 2000, 30-year yields were 6%, which is not very low. I would say this period could've been predicted fairly easily when the oil crisis ended.

To me, the weird thing is that yields kept falling from 2000-2007. The housing bubble was still inflating, which you would expect to cause higher prices, higher inflation and higher yields. Instead they just kept falling. I think some of it is that people realized how safe US treasuries are, relative to other country's bonds - especially after the Asian financial crisis of the late 90's.

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#9) On May 23, 2013 at 9:13 AM, ETFsRule (99.94) wrote:

.

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#10) On May 23, 2013 at 9:15 AM, ETFsRule (99.94) wrote:

Treasuries and inflation, 1977-2000

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#11) On May 23, 2013 at 9:15 AM, ETFsRule (99.94) wrote:

.

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#12) On May 23, 2013 at 11:42 AM, Mega (99.95) wrote:

The Fed has a "dual mandate" to promote growth/employment and limit inflation. So if inflation seems reasonable, their bias is towards lowering interest rates, because they think it could improve employment.

Bond traders basically follow the Fed's lead. If you bet against the Fed you get run over.

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