The Latest Bubble

Clearly the 30 year bond which is yielding in the 3.18% range. Add in the 10 year at 2.69%.

Yes, we know about the economic carnage, falling commodity prices, assets of all types, but would anyone with good sense lend the U.S. government money that far out? The U.S. gov is bankrupt everyone knows it. Add it Social Security, Medicare and the 50% of GDP that has already been allocated to bailouts and the only option left is to debase the currency.

We don't know if the dollar will drop vis a vis the yen, Euro, or Pound. We do know that you can guarantee it will lose value over the next 10 through 30 years in terms of groceries, gold, college tuition and health care.

There is currently asset deflation, but for most Americans the cost of health care, tuition, groceries, utilities, fees to renew a driver's license, register a car, myriad of sales and incomes taxes is not dropping one bit.

Don't be fooled. We are not experiencing real deflation, but deflating asset prices. Daily costs are not falling.

We look at treasuries as the "last bubble standing." Trade it if you have the skill, don't buy and hold.


http://bloomberg.com/apps/news?pid=20601087&sid=aujABg8jkhqg&refer=home