That is the problem esmith. Common sense would dictate that the 10 year would not go down more because of your statement and other rationale. However common sense would have also dictated that in order to get our own financial mess in order we should have seen higher interest rates many years ago. How do we know that the there is not any behind the scenes nudging of purchasers both foreign and domestic of US debt.
If you try to out think the market generally you lose. I am not saying you are incorrect. I am just trying to say that long long ago I gave up trying to apply my simplistic rational analysis. The marketplace is not controlled by common sense and visibility. Unfortunately I believe it is much more controlled by other forces of which I and the general public have little to no control over. So all I can do is watch it, try to make money off of it and get the best deal I can off of it.
As I say there are many many who are well versed in the bond market and bond trading. You very well may be quite correct in your analysis. My stance is a bit more cautious which is, I have no clue where the bottom is, but someday it damn well has to go up… and farther into the future way up.
