The Phaserl


If the Largest Treasury Owners Are Selling, Who’s Left to Buy?

by Andy Hoffman,

Yesterday, I wrote of how the largest “pink elephant” in financial markets HISTORY; to date, all but ignored by the MSM – is the fact the 30-year bull market in U.S. Treasury bonds is decidedly OVER.  Worse yet, the current bond bubble was inflated by a “Fed gone wild” to unprecedented levels of overvaluation; and thus, as they say, “the bigger they come, the harder they fall.”

No matter what metric is utilized to measure Treasury bond valuations – be it money supply growth (reported and unreported); inflation (reported versus real); debt; secular economic trends; Congressional dysfunction, geopolitical tension; or otherwise – the paradox of record-low interest rates sticks out like a sore thumb. At this point, even the most disingenuine, ignorant, and “patriotic” must admit that ONLY Federal Reserve “QE” buying has kept rates this low; and frankly, that only increased QE even has a chance at preventing a “disorderly” collapse.

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1 comment to If the Largest Treasury Owners Are Selling, Who’s Left to Buy?

  • Ed_B

    This is an excellent analysis on the state of the US T-bond market and abuses that have been heaped upon it by the Fed. Like most bubbles, the more air that is pumped into it the bigger the bang when it bursts. Thanks to the Fed, the bond bubble has been converted from a few sticks of dynamite to a nuclear warhead.

    The world is awash in debt and much of it is Western sovereign debt. As with anything else, the more of it there is, the lower its value… and there is a s**tload of this stuff out there.

    It is weird how so many people are mired in the paper paradigm and seem unable to look beyond stocks, bonds, and cash as places to store their wealth. As an investor, I try to look at all investing possibilities and not limit myself to only a few places to invest money. This market, however, is not an investors market – it IS a traders market. The US Gov and Fed have so manipulated and distorted the market that it is no longer possible to recognize it any more. Like all systems that are acted on by outside forces, its own natural equilibrium WILL re-establish itself at some point. When it does it will be like a huge earthquake undoing all of the changes made by men.

    I hope that all my brothers and sisters out there are prepping to the best extent that they can and are putting away some silver because all the manipulations and interest rate games are going to end very badly one of these days.

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