I saw a couple pro’s talking about this VERY TOPIC on bloomberg, late last week. And they seemed much smarter than the rest of the talking heads bloomberg usually parades through. And they only hinted at this market play when pushed and pushed at the end of the interview for WHAT they really are betting on. It was as if they didn’t want to give this strategy away.
To paraphrase,
“Well, the only bubble we see left is in US treasuries”
Yields are waay down on safety buying, yet this is a DOOMED currency. CONCLUSION: soon one can expect a major rate reversal as some stability in financial markets returns AND buyers realize they are holding trillions of US treasury notes denominated in a doomed currency!
Bond prices move opposite yields. Remember that my friends.
Now, help me out. Best way to take advantage of this reversal? I think we need to find a good short-term treasury fund to short.
Which one?
However, on this play, don’t forget to consider that really smart economists with good track records of predicting this overall financial mess (Roubini..etc) see this recession pulling CPI down to ZERO or even a couple percent BELOW zero, during the most intense quarters of deflation.
