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Treasuries Market Prices In Deflation


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#1 Realistbear

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Posted 23 June 2011 - 08:09 AM

http://www.businessw...-inflation.html

Bloomberg

Treasuries Gain Most in a Week as Traders Cut Bets on Inflation
June 23, 2011, 2:39 AM EDT


By Wes "Wesley" Goodman

June 23 (Bloomberg) -- Treasury 30-year bonds rose the most in a week on speculation the end of the Federal Reserve’s $600 billion debt-purchase program this month will depress commodity prices and slow inflation..../


“Inflation expectations are coming down, and that will put downward pressure on yields,” said Yoshiyuki Suzuki, Tokyo- based head of fixed income at Fukoku Mutual Life Insurance Co., which has the equivalent of $69.6 billion in assets. “Commodity prices have peaked with the end of QE2.” Fukoku bought Treasuries a few weeks ago, Suzuki said.

.../


The U.S. plans to sell $7 billion of 30-year TIPS today. The previous auction of the securities in February drew a 2.19 percent yield, and the rate has dropped to 1.81 percent.

Japanese 10-year bonds yields dropped 1.5 basis points to 1.105 percent, matching the least since November. The Ministry of Finance sold 2.425 trillion yen ($30.5 billion) of two-year notes today at an average yield of 0.152 percent, the lowest level at the monthly auctions since October.








Stay long on your bond funds muchachos! Deflation cometh...................... :o *















* :D

Edited by Realistbear, 23 June 2011 - 08:13 AM.

CRIMBOCASTS for y/e 2013

1. The Euro will have another bad year and may hit parity with the US$ before the end of the year.
2. The Pound will not move much against the dollar (range 1.47-1.60) but is likely to regain a lot of ground verses the Euro which may not survive. US $ will be a safe bet, especially ST bonds and large caps.
3. Stocks should finish moderately higher than 2012 barring a war with Korea and Iran.
4. Gold will not be flying to the moon (again) and will bitterly disappoint (again) any who got in during the run up in 2011.
5. House prices: Flattish to up single digits overall..
6. Not much in the way of inflation again this year--those who forecast hyperinflation will be proven wrong (again--as in 2011 and 2012)
7. Could see a snap GE after the May elections which will be the worst result EVER for Dave. UKIP continue to make headway and will be number 3 before year end.

#2 Number79

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Posted 23 June 2011 - 08:13 AM

Give it a rest ffs.

Not getting a rise in rates is not the same as deflation. It is just no increase in the inflation that already exists.

#3 dom

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Posted 23 June 2011 - 08:14 AM

US treasuries are the big short bet of a lifetime. There must be so much money on the sidelines waiting for this one to pop.

#4 Realistbear

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Posted 23 June 2011 - 08:17 AM

Give it a rest ffs.

Not getting a rise in rates is not the same as deflation. It is just no increase in the inflation that already exists.



Speak to the FT about it and that nice Japanese Gentleman with the rude name--they published the story. And the FT don't usually publish a lot of nonsense and the bond market does tend toward accuracy as a predictor of what is coming down the road.

Gone long on metally inflation hedges by any chance? ;)
CRIMBOCASTS for y/e 2013

1. The Euro will have another bad year and may hit parity with the US$ before the end of the year.
2. The Pound will not move much against the dollar (range 1.47-1.60) but is likely to regain a lot of ground verses the Euro which may not survive. US $ will be a safe bet, especially ST bonds and large caps.
3. Stocks should finish moderately higher than 2012 barring a war with Korea and Iran.
4. Gold will not be flying to the moon (again) and will bitterly disappoint (again) any who got in during the run up in 2011.
5. House prices: Flattish to up single digits overall..
6. Not much in the way of inflation again this year--those who forecast hyperinflation will be proven wrong (again--as in 2011 and 2012)
7. Could see a snap GE after the May elections which will be the worst result EVER for Dave. UKIP continue to make headway and will be number 3 before year end.

#5 Number79

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Posted 23 June 2011 - 08:22 AM

Speak to the FT about it and that nice Japanese Gentleman with the rude name--they published the story. And the FT don't usually publish a lot of nonsense and the bond market does tend toward accuracy as a predictor of what is coming down the road.

Gone long on metally inflation hedges by any chance? ;)


Metals do better in times of low real inflation anyway, or have you to busy linking articles over the last 3 years to notice?

#6 Injin

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Posted 23 June 2011 - 08:40 AM

Speak to the FT about it and that nice Japanese Gentleman with the rude name--they published the story. And the FT don't usually publish a lot of nonsense and the bond market does tend toward accuracy as a predictor of what is coming down the road.

Gone long on metally inflation hedges by any chance? ;)

The bond market misses absolutely everything of importance.

It certainly misses inflation every single time, but it's also failed to spot such small things as looming world wars, mass terrorism, global trends such as computing etc etc

Bond are safety investments for people who can't think straight and don't notice they always lose money.
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#7 hotairmail

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Posted 23 June 2011 - 08:42 AM

US treasuries are the big short bet of a lifetime. There must be so much money on the sidelines waiting for this one to pop.




In a crisis though, the most desirable thing in the world is the thing that debts are denominated in. (scepticustm )



#8 MrFlibble

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Posted 23 June 2011 - 08:48 AM

Nothing like the fresh smell of deflation in the morning :)
"Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves." - Norm Franz

In Gold we trust...

#9 gravity always wins

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Posted 23 June 2011 - 09:11 AM

Since Benny whacked the bond vigilantes with his printing press there is only one vigilante left.

Its golden and it ain't telling warning you of deflation.
"There is no effective way to meaningfully reduce emissions without negatively impacting a large part of the economy"
Alan Greenspan 2007 Former Chairman of the Federal Reserve

"The gross national product includes air pollution and advertising for cigarettes and ambulances to clear our highways of carnage. It counts special locks for our doors and jails for the people who break them. GNP includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm, and missiles and nuclear warheads... It measures everything, in short, except that which makes life worthwhile"
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#10 gravity always wins

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Posted 23 June 2011 - 09:13 AM

In a crisis though, the most desirable thing in the world is the thing that debts are denominated in. (scepticustm )

History says thats bullcr*p as every paper currency has collapsed inspite of it being the currency its worthless and unpayayable debts are denominated in.
"There is no effective way to meaningfully reduce emissions without negatively impacting a large part of the economy"
Alan Greenspan 2007 Former Chairman of the Federal Reserve

"The gross national product includes air pollution and advertising for cigarettes and ambulances to clear our highways of carnage. It counts special locks for our doors and jails for the people who break them. GNP includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm, and missiles and nuclear warheads... It measures everything, in short, except that which makes life worthwhile"
Senator Robert Kennedy

#11 'Bart'

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Posted 23 June 2011 - 09:58 AM

In a crisis though, the most desirable thing in the world is the thing that debts are denominated in. (scepticustm )

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#12 leicestersq

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Posted 23 June 2011 - 10:07 AM

No Tepid Thursday thread today.

Pound is down below $1.60. FTSE down a pretty big 50 points, and falling. UK 10yr Gilts yielding lower than 3.2%, and yields on the PIGS showing large gains, including Italy and Spain. Something is rumbling.

#13 inflating

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Posted 23 June 2011 - 10:14 AM

Give it a rest ffs.

Not getting a rise in rates is not the same as deflation. It is just no increase in the inflation that already exists.


exactly

#14 hotairmail

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Posted 23 June 2011 - 10:34 AM

History says thats bullcr*p as every paper currency has collapsed inspite of it being the currency its worthless and unpayayable debts are denominated in.




Well gravityisaloser, we're all doomed. Every star will extinguish, every life form will die, every government, every fiat currency will fall out of favour.


Timing, at the end of the day is of the essence.

So what exactly do YOU think will happen, and when?



#15 council dweller

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Posted 23 June 2011 - 10:55 AM

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The face says it all.....
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