Friday, March 30, 2012

Treasury Securities Head to Second Monthly Loss

Treasury prices edged up Friday but are still heading toward a second straight month of steep losses.

Yields on 10-year notes fell 1 basis point to 2.15%, today. However, a month ago, the benchmark security yielded 1.98% and yields are up from 1.87% at the end of 2011. This despite Bernanke's "Operation Twist" which is designed to drive down long term Treasury bonds.

Given the debt the Treasury will have to raise (which will increase as rates climb)and the fact that China and the Social Security trust fund are no longer net buyers, coupled with the price inflation that will result because of Fed money printing, there is going to be huge upward pressure on bonds.

This is not the time to own bonds of any type, Treasury bonds, muni bonds, etc. They are going to be big losers for many, many years.

No comments:

Post a Comment