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

To: loantech who wrote (6127)	1/24/2004 9:49:15 PM
From: glenn_a	Respond to of 110194

Hi Loantech (smile). Yep, I still like gold and silver - both the metal and select junior miners. And energy. And my Chinese integrated forest company. But am also worried that a deflationary bust could cause substantial liquidity problems. So I also have a fair chunk of $CDN Government short-term T-bills. However, do I want to own U.S. Treasuries and financial assets being propped up by central banks and hedge funds for purposes, as Coxe says, endogenous to the asset class itself? And in the case of 10-year Treasuries also used as a hedging instrument to offset mortgage-back exposure. No thanks. Here's another great line from Coxe's call yesterday: "Now, what I want to suggest is that a strategy based on the the assumption that you know 12 months ahead what the governments of China, Japan, and South Korea are going to do, is one that ordinarily you would factor in some investment premium for that risk. But instead, Treasuries are still being treated as the least risky bonds in the world ... because they're the most liquid. That may once have been true, but it's not true anymore. And so I believe that what we have within the US bond market is a situation where the bedrock bonds are actually much more riskier than investors perceive, and that their apparent strength is an illusion. And the source of that strength could be withdrawn at any given time." Yikes. Best regards, Glenn