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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (3354)	12/15/2003 12:00:19 PM
From: Real Man	Read Replies (1) \| Respond to of 110194

I guess you can play carry trade with others then. I don't really know how this will happen, but the treasuries, BLS aside, already have negative real yield. I think you are right, and there may be a flight from junk bonds to safety, but foreigners, who control 4.2 Trillion $ mostly in treasuries, could notice negative real yields earlier than others, and dump. It's a question of who is stronger - an elephant (foreign selling), or a whale (domestic distress and carry trade buying). I agree that buying could occur first, but I don't want to bet on that -g- Trades against USD, such as commodities, precious metals, foreign currencies and bonds, etc. are better investments at this time. One could also short bonds, if you believe in the credit bubble collapse, but I think that's too risky at this point, since your arguments are valid.