Will we ever see Treasury yields above 8%?

Quote from TGregg:



...That's the interesting catch 22 we are in. If we inflate to pay down the debt with cheap future dollars, we'll trash our ability to refi. Unless of course we lock in long term rates. Which is why smart folks are watching the auctions - if the feds seriously ramp up long term financing, that means they are ready to ramp up inflation...
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Here we go:

Treasury Secretary Timothy Geithner is seeking to lock in near-record-low borrowing costs by lengthening the average due date of the Treasury’s borrowings.
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Department officials on Nov. 4 announced a long-term target of six to seven years for the average maturity, barring unexpected borrowing needs. The average is currently about 53 months, according to Treasury data, below the historical average of about five years.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aziEzwrFdCO0
 
As Robertson suggests in the above commentary and 30 min video....

The wild card is whether or not it will be the choice of China and/or Japan to continue to buy US debt....because of their own internal problems....

What if economic conditions in China/Japan warranted the selling of US debt ?

Just who is going to buy the $trillions that the US supposedly needs ?

Furthermore....just why is it that the politicos cannot see this picture....and start downsizing the govt. in earnest ?

And most importantly plant the seeds for growth.....

Cap and Trade....Medical....etc...all are add-on costs that deny growth....

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One interest rate dampner would be severe deflation as described by....

http://www.investmentpostcards.com/...ss/VYxj+(Investment+Postcards+from+Cape+Town)


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Do note that Julian Robertson is nobody's fool....he has a "real" track record of success....
 
Quote from libertad:
Do note that Julian Robertson is nobody's fool....he has a "real" track record of success....
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Arguably, while very successful overall, he actually has a track record of failure in these sort of trades.
 
Quote from Martinghoul:

Arguably, while very successful overall, he actually has a track record of failure in these sort of trades.
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1000% Correct.....in the short run....as mentioned in the video....

The short term part he was plus....the long term ....not good....

Because the short rates are so low....he moved from a steepner to the cap strategy....

So actually the trade is not over.....

The play is all about the long side....Shorting long bond prices....

School is still out....

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ie Buffett buys a RR....it could go down a lot before it goes
positive....ie 10 years....

It could fail for 5 years and then succeed.....

What does Buffett know ....that the time to buy a RR is
when the economy is obviously not robust....

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Although deflation could get very ugly.....so could higher rates if China and Japan stop buying and actually start selling....

Trade is not over .....

What does Robertson know....that the 30yr rate and the US debt picture simply do not jive....

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What is also very clear is that risk is being overpriced since the short term rates have been govt. induced to 0-.25%....
 
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