Formula is simple, but so painful to stay on: more supply of treasuries to finance bailouts, more discount - higher Yield demanded. Buffet sells and buying equities, Bill Gross is not advising to buy Treasuries - world will listen. Higher Yield, higher Long Term rates, with artificially collapsing Short term rates determined by FED we are in a Negative Rate territory again like in 2002. All these talks about Deflation were at its high in 2002-2003 when rates were kept at 1% and Gold Bull has started its Run. When FED is choosing between debasing the currency US Dollar in reflation attempt and Depression with Deflation, Japan is all over their eyes: they will always err on Inflation side.
Warren Buffett leaves Treasuries to embrace equities
No comments:
Post a Comment