Saturday, December 13, 2008

’nuff said – 1

A Picture Of Treasury Yields Is Worth One Word: DEFLATION

Leading on from MGs post yesterday, this is one of two on Treasuries that i am posting. This deals with the 30-year bond.

Posted by techieman @ 09:01 AM (3108 views)
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4 thoughts on “’nuff said – 1

  • Interesting posts. EWI were right about inflation / deflation. It seems to me that we are seeing a panic here. Bonds did well in the Great Depression so the herd have charged there. Not to say that the same will apply for the years to come though IMO. The break in trend on chart 2 shows what looks like a blow-off to me. Once deleveraging has played out and bit more and Obama’s New Economy stimulous starts we might see the opposite, a crashing dollar and hyper-inflation in the years to come which means yields will go up and so will interest rates.

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  • Yes MG – basically thats what is being put forward by Prechter…….For now we have deflation then at some point the greenback collapses.

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  • This says it all.

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  • TC with high inflation interest rates will go up and high bond yields will force this on Central Banks as well IMO. So this is good for savers although by then devaluation has hurt us with respect to food prices and oil etc. The current deflation is going to make oil and commodities very expensive in the long run because of the reaction to this demand destruction. We are now seeing rapid supply destruction, closing mines, closing more expensive deep sea oil fields, reduction in food production. Any recovery will lead to high prices very quickly, i.e. inflation.

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