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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: nextrade! who wrote (94637)6/2/2008 7:26:44 AM
From: Rarebird  Read Replies (2) of 110194
 
Here are some of the factors weighing against bonds:

1. Inflation is running well ahead of bond dividends, which makes bonds only a slightly slower way to lose money than keeping it under a mattress.

2. Asian currencies are bound to rise as they find it unnecessary to keep buying US Treasuries due to the current recession in the US, which is also likely to spread to non-US economies. Asian buying has kept US bond prices artificially high and yields low. That era is ending.

3. The deficits being run by the US are unsustainable and will result in higher interest rates being charged by lenders.

With the coming weakness in the stock market, bonds could get a minor lift, but long term investors should use the lift as an opportunity to get out of bonds. More importantly, for savvy investors, this is an once in a life time ideal market opportunity to rake in the profits over the coming decades by shorting the rallies.

Bond Bear Rarebird
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