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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (28080)3/8/2005 12:40:17 PM
From: Jim Willie CB  Read Replies (1) of 110194
 
last message, this is brutally frustrating

you came up with this erroneously, not from me
"Invest in 1 yr US treasuries paying 3% per year or whatever"
you miss the leverage in each and every message, why???
in each and every message, I have said invest in 4% to 5% US Treasurys

put X$ million in down payment
borrow 30X$ million from Japanese bank at 1.5%
lock in that borrowed money from Japan, releasing cash to invest
30:1 leverage from bank loan, standard hedge fund practice

alternatively, use USTBond futures with 30:1 leverage
and do not use any 30x loan in Japan, instead your own money
bond futures price has built-in slow motion gain from interest yielded
(gold has built-in loss from storage cost)

minimum baseline gain is 30 x 3%
from difference on Japanese 1.5% cost and 4.5% US yield
if US 10-yr TNote was used
heck, use the 5+% USTBond on the 30-yr

added gain comes if USTrez bond rises in principal, from lowered yield over the year
they are free to put on the trade when at upper rail on TNX chart
and to take it off at lower rail on TNX chart
these guys can read charts too!!!

subtract 18% from 90% to get ONLY 72% gain with TENS
subtract 18% from 110% to get ONLY 92% gain with THIRTYS
subtract yen currency loss AFTER the leverage rate differential gain

if you misquote me anymore on what it involves, I cannot continue
please dont change the trade then disagree with it
good luck in figuring this out
put it on the effing wall, stare at it
where did I say invest in 1-yr USTrez ???
/ jim
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