With QE2, i.e., money printing, inflation will start overseas and wind up on our door step. With inflation people will be chasing higher yields, hence they will leave the short term bond market, happening already. What boggles me is that even when/if the fed raises rates,assuming the economy is in recovery mode(leap of faith there) more businesses will borrow, hence the need for bonds. Now even though this may play out, it seems to me that anyone entering the bond market too early will get stung, is this free market at it’s best. WHERE SOMEONE WITH FORESIGHT INTO A FUTURE NEED GETS PENALIZED.
