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

To: LTK007 who wrote (248614)	5/18/2010 1:13:56 PM
From: ChanceIs	Read Replies (1) \| Respond to of 306849

RE: TBT In response to your queries: 1) Yes, shorting the TBT calls implies shorting TBT or effectively getting long Treasuries. However....i am already long TBT (short Treasuries) so what I am doing is hedging or balancing. I have every faith in the long term worthlessness of US Treasuries and the collapse of the fiat dollar. However I can't say when. Roubini, Whitney, Ferguson, Rogers et al seem to think that it will be within 12 months. The election year "Rite of Printing" will stave it off a bit, but the hangovers get progressively worse. 2) Yes I think that $36 represents a good floor for the TBT. Remember that in that great panic, short terms rates actually went negative - you had to be to be involved in Treasury bills (less than one year duration). I would have to go back and see what the ten year rates did. however I am banking on two factors: 1) that was a severe panic which put in some sort of floor/psychological barrier. 2) More importantly, rates can only go so low. We had to have been pretty close for the ten year. The FED is clearly buying paper to prop up the Treasury auctions through a broker's broker of some sort. Sooner or later that will stop, and supply will exceed demand. Treasuries will then drop. The Chinese don't like this game. And finally 3) Whence came the cash to purchase all of those Treasuries to drive the TBT down to $36. I don't know, but I would venture to say that it flew out of the stock market. Can the equities go back down to "666?" I think so, but you know that that is a rather monumental floor. It will take some real work to breach that. Another thought. The equities are up on FED printing. However the money supply is contracting and banks still aren't lending - except back to the FED. For sure Big Bad Ben is a one trick pony. He will freak out and run the presses harder than ever. The previous (current) batch of printing did raise the equities, and in some way probably prevented a collapse of the bond market on the phony money. But no "Round 1" phony money has been recalled. Will bond holders stand idly by for "Round 2" of printing? What happens when the CRE's need to be rolled over?