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23 thoughts on “30-Year and 10-Year Treasury Yields Approach Record Lows”
C. Griffithsaid:
Whatever happened to the notion by several conservative financial writers that if the 10yr ever broke below 2%, the bond markets would implode ??
People say one hing while doing another. If the UK made such a bad decision leaving the EU then their rates should be rising. Looks like investors think parking money in UK and US treasuries is a safe bet for the time being, surprise surprise.
Well their rates are rising in the sense that the British pound has depreciated dramatically since the vote. If you happened to owe and your income comes in the form of pounds, it has just gotten more expensive to service your debt.
On the other hand investors who want to get out of pounds or Euros would find US Treasuries a fast and easy play, especially if they wanted to move a huge amount of cash from EU based currency to US.
I mean, it’s difficult to believe hard core Keynesians will ever capitulate to deflation,,,so, where do you go from record bottoms in yields? Artificially low interest rates beginning to be perceived as deflationary, that is?
For the turning point in all this, breaking of the buck in the MM could be key to lighting the fuse that will goose the Fed into hyper drive. Especially if the FDIC doesn’t back ’em next time.
In a new world of 100% debt based currencies, history doesn’t offer much to go on here. Rickards was likely right i.e.; currency wars,,,just very early.
Yields on dollar cash “which the Federal Reserve absoltuly controls 100%” have moved sharply higher today…causing the dollar index to surge.
The plunging yields must be because the USA isn’t borrowing and spending enough…thus requiring an immediate return to the Gold Standard lest the solvency of the US Republic becomes readily apparent, the dollar of course will collapse then…and gold will not be able to be had at any price.
Yep…today’s the day to start buying gold hand over fist no doubt!
Short term, not so sure AU is always a good inflation hedge. It didn’t pay off so well in the last Billary regime. Financials and RE were better devaluation bets.
Imagine a ban on AU investments in IRA accounts, coupled with a 30% excise tax on PM’s. What would that do at the margin? Considering so much gold is consolidated in the genre of ETF’s these days?
Really, what Central Bank wouldn’t love to add to it’s holdings at a deep discount while simultaneously decoupling it’s currency from real money?
It’s a great time for the Fed to start liquidating the balance sheet. At this time, it does no good to hold its purchases, the financial markets can use the marketable investments, housing does not need additional liquidity, much if not all can be sold at a gain rather than run off at maturity. It can reload for anything unexpected. It’s a perfect opportunity, which will be squandered I’m sure.
The Federal Reserve has a quarterly audit. The latest (march 31st) had balance sheet with unrealized capital gain of $219 billion (with recent plunge in yields that figure a lot higher). Plenty of room to sell without taking hit … and provide Treasury with nice dividend to offset deficit.
Are you saying I Should not buy a house now? I mean… inventory is shot under 300K in ATL, but what will I miss another implosion of the housing market in the coming months?
No one can answer that but you
If you want a house – can afford a house – do not care if it will go down in price – and have no fear of you or your wife losing your job, go ahead, buy a house. I have a house. I like living in houses, not apartments. But there is a strong case to be made for not having any ties, mortgages, property taxes, etc.
Sell some if you got ’em. I have been, and re-investing the profits in Au (physical).
There will be a correction in Treasuries soon enough, providing an opportunity to at least partially re-load.
That is the way I have been playing this game for the past four years.
Funny, I have 5 year bank CDs that pay more than a 30 year bond. Crazy times we live in.
US is once again the safe haven investment. Ever since Greece became news worthy the dollar and bonds have been bid. No need to worry about rising rates or dollar issues for a very long time. Greece isn’t even solved after 7+ years.
Until Spain and Italy “go Greece” (i.e. collapse) there will be a constant trickle of bad news coming from Europe, scaring investors into dollars. I have a small amount of gold and silver, but don’t think I’ll need it for decades.
The Elliott wave pattern on the chart of the yield on the 30 year bond is an ending diagonal. This means a VERY sharp reversal in yield is due starting within a month. My assessment is a liquidity crisis leading to a solvency crisis is about to happen.
Whatever happened to the notion by several conservative financial writers that if the 10yr ever broke below 2%, the bond markets would implode ??
Guess what other country’s bonds are hitting record lows? 🙂 http://www.bloomberg.com/quote/GUKG30:IND
I’m sure it is pure coincidence that socalbeachdude (Adam Price) hasn’t posted in a while ….
I put him on moderation – but he hasn’t even tried to post for quite some time
People say one hing while doing another. If the UK made such a bad decision leaving the EU then their rates should be rising. Looks like investors think parking money in UK and US treasuries is a safe bet for the time being, surprise surprise.
Well their rates are rising in the sense that the British pound has depreciated dramatically since the vote. If you happened to owe and your income comes in the form of pounds, it has just gotten more expensive to service your debt.
On the other hand investors who want to get out of pounds or Euros would find US Treasuries a fast and easy play, especially if they wanted to move a huge amount of cash from EU based currency to US.
Why would the avg person in Britain owe debt in a foreign currency? Maybe banks or corps?
Bring on the Benny Coptors!
I mean, it’s difficult to believe hard core Keynesians will ever capitulate to deflation,,,so, where do you go from record bottoms in yields? Artificially low interest rates beginning to be perceived as deflationary, that is?
For the turning point in all this, breaking of the buck in the MM could be key to lighting the fuse that will goose the Fed into hyper drive. Especially if the FDIC doesn’t back ’em next time.
In a new world of 100% debt based currencies, history doesn’t offer much to go on here. Rickards was likely right i.e.; currency wars,,,just very early.
Sooo, …. you’re saying don’t hold my breath waiting for socalbeachdude (Adam Price) to comment here ?? …
Anyways, creeping ever closer to my years ago call that the 10yr yield will hit 1%.
Yields on dollar cash “which the Federal Reserve absoltuly controls 100%” have moved sharply higher today…causing the dollar index to surge.
The plunging yields must be because the USA isn’t borrowing and spending enough…thus requiring an immediate return to the Gold Standard lest the solvency of the US Republic becomes readily apparent, the dollar of course will collapse then…and gold will not be able to be had at any price.
Yep…today’s the day to start buying gold hand over fist no doubt!
Short term, not so sure AU is always a good inflation hedge. It didn’t pay off so well in the last Billary regime. Financials and RE were better devaluation bets.
Imagine a ban on AU investments in IRA accounts, coupled with a 30% excise tax on PM’s. What would that do at the margin? Considering so much gold is consolidated in the genre of ETF’s these days?
Really, what Central Bank wouldn’t love to add to it’s holdings at a deep discount while simultaneously decoupling it’s currency from real money?
It’s a great time for the Fed to start liquidating the balance sheet. At this time, it does no good to hold its purchases, the financial markets can use the marketable investments, housing does not need additional liquidity, much if not all can be sold at a gain rather than run off at maturity. It can reload for anything unexpected. It’s a perfect opportunity, which will be squandered I’m sure.
Your observations made too much sense for this audience.
More likely the Fed’s balance sheet ends up in the shredder 😉
Ha … you speaking my language.
The Federal Reserve has a quarterly audit. The latest (march 31st) had balance sheet with unrealized capital gain of $219 billion (with recent plunge in yields that figure a lot higher). Plenty of room to sell without taking hit … and provide Treasury with nice dividend to offset deficit.
Are you saying I Should not buy a house now? I mean… inventory is shot under 300K in ATL, but what will I miss another implosion of the housing market in the coming months?
No one can answer that but you
If you want a house – can afford a house – do not care if it will go down in price – and have no fear of you or your wife losing your job, go ahead, buy a house. I have a house. I like living in houses, not apartments. But there is a strong case to be made for not having any ties, mortgages, property taxes, etc.
Sell some if you got ’em. I have been, and re-investing the profits in Au (physical).
There will be a correction in Treasuries soon enough, providing an opportunity to at least partially re-load.
That is the way I have been playing this game for the past four years.
Or we go to negative interest rates
Funny, I have 5 year bank CDs that pay more than a 30 year bond. Crazy times we live in.
US is once again the safe haven investment. Ever since Greece became news worthy the dollar and bonds have been bid. No need to worry about rising rates or dollar issues for a very long time. Greece isn’t even solved after 7+ years.
Until Spain and Italy “go Greece” (i.e. collapse) there will be a constant trickle of bad news coming from Europe, scaring investors into dollars. I have a small amount of gold and silver, but don’t think I’ll need it for decades.
The Elliott wave pattern on the chart of the yield on the 30 year bond is an ending diagonal. This means a VERY sharp reversal in yield is due starting within a month. My assessment is a liquidity crisis leading to a solvency crisis is about to happen.