on Bonds, 3-10 year maturity zone is flat, not inverted
referring to Barrons page MW8 yield curve
the inversion is with 30yr versus 10yr yield
the phenomenon is due to Fed refunding of 30yr TB from federal receipts surplus
inflation IMO is nowhere to be seen for the next half decade
too many productivity forces: labor, equipment, internet
with inflation so small a threat, I would go out in years
as for fixed versus variable, inflation might tick up somewhat as Asia and Europe get out of their funk and socialism putrid mess respectively... so perhaps interest rates might be somewhat higher in 12-18 months
but then again, as artificially low as rates descended during the Asian Meltdown, I believe rates will temporarily rise in reaction response... I expect rates to be steady for several months after the next 2-3 are over
this is complex stuff... I think rates will rise slightly for about 4-6 months, then steady out for two years... if any bias exists, eventually the bias will be toward ever so slightly rising rates until all continental cylinders are firing... after all continents reach equilibrium, then rates will flatten and become very stable
Pax Americana has begun, led by American technology and financial engineering
any other comments welcome
my ten cents, Jim Willie |
