The real reason treasuries are falling

Quote from lrm21:

Thanks for the analysis RR as usual you provide meaningful input.

The crash in bonds is happening as was expected.

the next dominoes are the dollar and as an effect skyrocketing prices of dollar based foreign goods


the current government policies are the lighter fluid to the inferno of dollar deval.

Something i once thought to be the effect of misguided policies i know believe it the primary intent of the current powers to collapse the currency
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You could be right. As we see World banks inflating the Chinese consumer, while contracting all american lending, the trade deficit is narrowing and china's surplus is collapsing. Is their intent a large intervention in the world trade system to offset the global imbalances? The problem with meddling in markets, is always unintended consequences.
 
Quote from RiceRocket:

You could be right. As we see World banks inflating the Chinese consumer, while contracting all american lending, the trade deficit is narrowing and china's surplus is collapsing. Is their intent a large intervention in the world trade system to offset the global imbalances? The problem with meddling in markets, is always unintended consequences.
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This will undoubtedly get ugly.
 
Quote from austrijec:

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Quote from RiceRocket:

The massive selloff in the long end treasuries is not due to the change in failure to deliver rules, or the massive amount to be financed in the coming months. Think about the date. We are 15 days out from last year's tax filing deadline. This is about how long the treasury needed to calculate the income from this year's tax receipts. Those calculations have surely been leaked to the major dealers that trade treasuries. The number must be horrific.

Treasuries are in a serious bear market now, and are going to have a tough time until the economy shows signs of any "real growth", non-inflationary growth. Tax revenues have basically disappeared. The only way the government will be able to finance this massive, monstrous new interventionist policy without crashing the dollar is to print, print, print, and print more and raise the interest rate that's paid on those printed dollars.

So, that massive short squeeze/quantitative easing rally that happened last fall is now done. We are now in a new reality for US government debt.
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A major problem I have with this analysis is that I didn't think of it!!! I always hate when that happens :mad: Your reasoning is clear and logical! Thanks for the insight!

-gastropod
 
Who's worried about the federal reserve stepping in further? It's dangerous to short treasuries without clear and drawn out intentions from the fed. My fear is being short treasuries in some fashion and then have the federal reserve monetize even further and kill positions.
 
^ agree that the fed has something to do with it.

My first reaction to the thread was that the Fed had stopped buying so aggressively, and that's why long yields were rising again...

who knows what they will and wont do. I don't think they know themselves.
 
Quote from matgallis:

Who's worried about the federal reserve stepping in further? It's dangerous to short treasuries without clear and drawn out intentions from the fed. My fear is being short treasuries in some fashion and then have the federal reserve monetize even further and kill positions.
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I agree that the fed can prop up treasuries, but it will be at the expense of the dollar. They are trying to dam the colorado river with a twig. The flow will eventually find a path no matter what they do.

A good trade is short the dollar, short treasuries. Heads, I win, tails you lose trade.
 
Against the EUR the dollar will NOT go down. The dollar will more likely go up, and break the 1.25 line before the end of this year. The move may even start this week.

How many of you have gone long the bonds in the 115 area? R U under? Many were explaining why bonds will go to 195. It was just less than 5 months ago. Some of those who gave such explanations are now in this thread giving an opposite explanation.
 
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