Treasuries back to 10% - Is it possible?
- Thread starter Comptalk
- Start date
Anything is possible but for that to happen, the dollar has to weaken significantly. At the present, the dollar is gaining strength against other currencies.
Greenspan forecasts an 8% ten year treasury sometime in the next 20 years. he says a fiscal crisis due entitlements could send it much higher. If you combine the final ratio of debt to GDP that this crisis will generate, low GDP growth(regulation, higher taxes) after the crisis and the entitlement mess, I think 8% will be easly reached. But I wouldn't short tbonds this year
10 % isn´t yet an adequate risk premium to finance US debt for the next 20 years.
What would the ZB trade at, if the 30year would yield say 10%?
Apparently Bernanke has said something to the effect, ".... If printing money makes the Dollar crash, so be it..."
Might not be that simple. If the Dollar is crashing and bond holders (especially Japan and China) dump their bonds, interest rates are likely to SKY... thus defeating Bernanke's print-money play.
Bernanke is dangerous. I said that even before he was appointed. He wouldn't be the first to "cling to an idea all the way through to destruction"...
Might not be that simple. If the Dollar is crashing and bond holders (especially Japan and China) dump their bonds, interest rates are likely to SKY... thus defeating Bernanke's print-money play.
Bernanke is dangerous. I said that even before he was appointed. He wouldn't be the first to "cling to an idea all the way through to destruction"...
What is inevitable is that "those that do not owe" are going to pay....
Either through:
1) Taxation
2) Inflation
3) Both 1 and 2
..........................................................................................
A huge loss has been incurred, and is not going away.
And there is nobody else left to foot the bill except for "those that do not owe".....
.......................................................................................
Without a doubt, the eloquent political speech will be the new "US Bank of the Future Program"....
Come one, come all....obtain one's due....and in an emotional political stupor....like the fact that one has the "priviledged opportunity" to participate in this new endeavor....
Either through:
1) Taxation
2) Inflation
3) Both 1 and 2
..........................................................................................
A huge loss has been incurred, and is not going away.
And there is nobody else left to foot the bill except for "those that do not owe".....
.......................................................................................
Without a doubt, the eloquent political speech will be the new "US Bank of the Future Program"....
Come one, come all....obtain one's due....and in an emotional political stupor....like the fact that one has the "priviledged opportunity" to participate in this new endeavor....
About 70 or a little more
This assumes the contract deliverable stays at 6% (they might move it back to 8% again) and the cheapest to deliver moves out on the curve.