Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (208153)	6/25/2009 5:10:19 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 306849

I have been thinking a lot about this week's bond sales, and it makes total sense. 2 year, 5 year, and even 7 year sales should be very strong right now. Most knowledgeable experts are saying that we will have eventual (hyper) inflation with a bout of deflation quite possible between now and then. OK, I have a buttload of money that I really want to be safe. If I buy 2 years I should be able to renew at a much higher rate in 2 years if inflation starts to kick in. If deflation comes first, I might even make a lot of money. Same for 5 year. Could even work for 7 year. Now think about the long end, 10, 20, and 30 years. Those three will definitely get whacked by the inflation. Heck, the USD might not even be the safe haven currrency in 10 years! Massive risks in these securities. If you have been a buyer of the long end, and are holding a bunch of them, what do you do now? I would definitely be selling them and buying short term Treasuries if I really wanted to stay in Treasuries. I am really looking forward to the next long dated auction. If I am right then the bulls are going to get a real big surprise. Long term auctions are going to be terrible and once the long term holders have finished shifting to short term securities, short term auctions are going to start being terrible too. When all those bond holders eventually want to sell, the government will still be trying to issue massive amounts of new Treasuries. That won't be fun for anyone in that market.