To quote, "There is an opportunity for all of us. It is going into a different business. You are going to become Long Bond Bear Inc.
As long as QE is there you can expect rallies from support but do not fear putting out a short line into near resistance. You will meet all you cash needs for a generation."
Jim
The following chart provides illustration to Jim's comments above. Knowing when is just as important as knowing why to short.
US Treasury Bond 20YR+ (TLT) And Bond Diffusion Index (DI):
Headline: GEAB N°53 is available! Global systemic crisis: Second half of 2011 – Get ready for the meltdown of the US Treasury Bond market
- Public announcement GEAB N°53 (March 17, 2011) -
Beyond its tragic human consequences (1), the terrible disaster that has just hit Japan weakens the shaky US Treasury Bond market a little more. In the GEAB No. 52, our team had already explained how the sequence of Arab revolutions, this fall of the “petro-dollar” wall (2), would translate during 2011 into the cessation of the massive purchases of US Treasury Bonds by the Gulf States. In this issue, we anticipate that the sudden shock experienced by the Japanese economy will lead not only to the halt in US T-Bond purchases by Japan, but it will force the authorities in Tokyo to make substantial sales of a significant portion of their US Treasury Bond reserves to finance the enormous cost of stabilization, reconstruction and revival of the Japanese economy (3).
With Japan and the Gulf States alone accounting for 25% of the total 4.4 trillion USD of US federal debt (December 2010), LEAP/E2020 believes that this new situation which is asserting itself during the first quarter of 2011, against a background of China’s increasing reluctance (holding 20% of US Treasury Bonds) to continue to invest in US government debt (4), carries the seeds for the collapse of the US Treasury Bond market in the second half of 2011, a market that now has only a single buyer: the US Federal Reserve (5).
Source: leap2020.eu
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