U.S. Treasuries tumbled on Monday after a $1 trillion plan to halt the euro zone's burgeoning debt crisis relieved investors of the fear that sent them scurrying into safe-haven government bonds last week.
Hurt the safe haven status of bonds? This is classic horse blinder analysis. If the world consists only of stocks, bonds, U.S. dollar, and secular trends last weeks rather than years then, yes, U.S. Treasury bonds qualify as a safe haven. Remove the blinders and you’ll see that gold, the world’s premier safe have asset, has outperformed bonds since 2001. This is illustrated by long-Term U.S. government bonds total return index (LTGBTRI) to gold ratio.
Long-Term U.S. Government Bonds Total Return Index (LTGBTRI) to Gold Ratio:
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