Saturday, March 24, 2012

The Day the Bond Market Crash Started

Given Fed money printing, which will be highly price-inflationary, along with the slowdown (halt?) in Chinese buying of  Treasury securities and the massive increase in funds the U.S. Treasury will have to raise, the bond market is in for a multi-year, perhaps multi-decade collapse.

UBS economist Larry Hatheway has declared the starting point of the developing massive downside move:

September 22nd 2011. Mark that date in your calendars. That is the day the secular bear market in US Treasuries began. On that date, ten-year Treasury yields made their lows of 1.72%. From there, we believe it's higher for longer.

Here's a look at 10-year Treasury rates going back to September 1, 2011, just before that bottom.


This is not the time to own long-term Treasury securities, municipal bonds or corporate bonds.  Forget about bonds for a very long time. When you hear the word "bonds", think radioactive.


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