Has the U.S. Treasury Implosion Begun?

I’ve been consistently warning that U.S. government bonds will eventually implode. Using history as a guide, I know that when the sell-off in bonds begins, it will be very swift. The magnitude of panics are inversely correlated to the degree in which investors are deluded. Some of the most ignorant comments I’ve ever heard have been on the bearish side for gold; hence panic buying in gold should be pretty substantial. As for bonds, take a look at the dramatic spike in 10-year treasury yields since Helicopter Ben decided to embark on QE2. As I’ve been saying, deflationists just don’t get it. In my opinion, it is likely that the early stages of the bond bubble collapse have begun.

Although U.S. government bonds are a disaster waiting to happen, it would be irresponsible of me to not give you some perspective here. Yields have spiked nearly 50% in about a month. To put it plainly, it is not necessarily the best time to open up short positions on bonds. If I had no position whatsoever, I would wait for some kind of partial retracement to go short. In fact, if I absolutely had to take a stance, I would probably favor going long bonds now. However, all bets are off if we spike above 4% on the 10-year. This will be the market’s message that the debt crisis is spiraling out of control; it would be the equivalent of gold breaking out above $1030 last year, never to look back again.

The recent sell-off in bonds has been sharp and swift, as I always warned it would be. I’ve been trying to explain that the buyers of bonds are speculators barely distinguishable from the speculators who brought the housing bubble to a crescendo. These investors are attempting to front run the Fed. Believe me, these are not “hold to maturity” investors. So many people make the argument that as long as investors hold to maturity, U.S.  bonds will do just fine. Assumptions like these are what blow up models time and time again. Garbage in, garbage out. Capital seeks preservation. Foreign holders of our debt will have no qualms about selling our debt and loading up on the short end of the curve. This totally changes the dynamic of our debt crisis, making Ponzi scheme financing that much more difficult.

If you have a $14 trillion economy and, let’s say, $500 billion in debt, a 50% spike in yields is manageable. But let’s say you have a $14 trillion economy and $14 trillion in debt. At this point, the increase in debt servicing costs is equivalent to the entire budget deficit of previous years. Wake up and smell the roses folks, debt operates geometrically.

Capital is taking on a “wait and see” approach as most markets correct. This makes sense because many markets, including stocks and commodities, were in overbought territory. Markets are still trying to find some footing here, so it would be wise to take smaller positions until further notice. The short U.S. government bond trade will eventually be one that the biggest investors in the world will take in size. We are not there yet, but eventually we will see some epic moves in bonds. Make no mistake about it: gold will be the prime beneficiary of such a move.

Share this article
  • Scott

    Until the bond rate goes beyond it’s long term average (I like to use the average over 20 years, 5.33 currently, as it encompasses at least two boom and bust cycles), I wouldn’t be getting too excited.

    • http://www.expectedreturnsblog.com Moses

      Your 20-year average calculates rates when they were in a secular bull. Even the biggest treasury bulls must admit that it is about time for the cycle to reverse.

      CS P/es are at about 22-23, correct, but they lag the market a bit. The 10-year period of CS calculations includes bubble-like valuations in stocks.

  • Johnm800

    Is TBT the best play on treasury bond implosion?

    • http://www.expectedreturnsblog.com Moses

      For small investors yes. Gold and silver are other options.

      CS P/es are at about 22-23, correct, but they lag the market a bit. The 10-year period of CS calculations includes bubble-like valuations in stocks.

  • http://www.siomunzus74.com Luigi Fulk

    I simply want to tell you that I’m beginner to blogs and actually savored you’re web-site. Probably I’m likely to bookmark your website . You certainly come with amazing article content. Thanks a lot for sharing with us your web-site.

  • http://lesbianporns.net click this site

    You need to be a part of a contest for one of the best sites online. I’m going to highly recommend this website!

  • http://www.beyourporn.com go to the website

    Oh my goodness! Amazing article dude!

  • http://mylife.net.br/profile/kystudda penny stock egghead

    I’m wanting to look at blogs containing music I like, but sifting through all the detached, outdated and crap blogs is a hassle. . I know there are thousands of blogs, is there a good resource to seek out the preferred ones?.

  • http://www.pornstarhut.com/18/corrida-en-la-boca-de-una-rubia-extranjera/ great post

    Apple now has Rhapsody as an app, which is a great start, but it is currently hampered by the inability to store locally on your iPod, and has a dismal 64kbps bit rate. If this changes, then it will somewhat negate this advantage for the Zune, but the 10 songs per month will still be a big plus in Zune Pass’ favor.

  • http://tokumei10.blogspot.jp/ Dee Wadleigh

    this site is cool!!!!!!!!!!!!!!!!! http://tokumei10.blogspot.jp/ thx read

  • http://tokumei10.blogspot.jp/ Arlinda Beger

    this site is coooooooooooooooooooooool!!!!!!!!!!!!!!!!! http://tokumei10.blogspot.jp/ thx read

  • Pingback: 21 Day Fix Review

  • Pingback: http://www.speedyhealthsupplements.com/product/Natures-Way-Alive-Gummies-Multi-Vitamin-for-Children-90-gummies

  • http://www.all4scrapebox.com Auto approve list

    I genuinely enjoy examining on this internet site , it has superb articles .

  • http://tresym3dia.net/nosotros/ trolled

    Superb web site. Numerous strategies here. Now i’m submitting that to a few close friends ans furthermore discussing throughout delightful. Of course, many thanks to the sebaceous!

  • http://tiny.cc/sugaring Sugaring Zürich

    Just put some truly scorching water- attempt boiling some on the stove- and allow it sit. I have a pot of boiling water ready to pour the moment I am performed using the wax. Simply because it truly is sugar, it is going to just dissolve right after a couple of minutes. Chances are you’ll should allow the water sit, pour it out and scrub, then put a lot more water in. Just be careful to not burn your hands.

  • http://tiny.cc/sugaringzuerich Waxing Zuerich

    I am defiantly striving this! I am a teenage woman with dark hair, super pale skin and my father’s hair pattern’s as embarrassing as that is definitely…
    I have tried Nair ahead of for sensitive skin; it left me having a enormous second degree burn on my legs…
    Typical waxing does not get all of the hair and my initial time waxing left me with a big scab in between my eye’s and I’ve so many scars from nicking myself while shaving.
    So, I am defiantly likely to test this out! Hopefully, I’ll get as fantastic of effects as the rest of you.

  • http://ow.ly/yav1q Haarentfernung Zuerich

    It certainly operates on the bikini area. I have completed it myself a number of instances with excellent final results. You just should function up the chutzpah to pull, and pull Rapidly, to obtain each of the hair.

  • http://canalcirugiabucal.es/foro/member.php?u=777681-D99Z Shawanda Bullivant

    Fantastic beat ! I would like to apprentice while you amend your site, how could i subscribe for a blog site? The account aided me a acceptable deal. I had been tiny bit acquainted of this your broadcast offered bright clear concept

  • http://alumnice.co/overthecounterstdtest51791 at home std test

    Remote viewing is used by psychics to look for impressions or information about a individual using their ESP. They also give me names of individuals in your family members tree and other residing family members associates and friends.

  • http://www.tuxmachines.org/node/66712 Jovita Cebula

    Which is some inspirational stuff. Never knew that opinions may well be this varied. Thank you for all the enthusiasm to supply such helpful data here.

  • http://hib.to/athomestdtest12838 at home std test

    No competition with others is required, you win by discovering yours and residing it. Numerous stunning vintage Christmas are from European countries this kind of as Germany and England. Take time to appreciate and protect what you have.

  • http://www.kompostowniki.pl/forum/profile.php?mode=viewprofile&u=6752 klocki

     So tax increases will allow us the tools shown in this matter. Who have lost patience until people interested in lending money . Greece , I do not want to word it to a trusted mechanic or converted . Taking a bath in place of shower , Internet banking, noted that any delay repayment of the loan the bank commission . It differs from the fire again and again often canvas fraud is growing . But most importantly, routinely determines its own contractor . Actions will be richer .

  • http://www.cbsexe.com/6/follando-a-una-colegiala-rubia-de-ojos-azules/ good article

    You ought to be a part of a contest for one of the greatest websites on the net. I most certainly will highly recommend this web site!

  • Pingback: Who is Urazov Nuray

  • http://www.youtube.com/watch?v=LH5koAPe2SI top funny commercials

    Here are a few of the websites we advocate for our visitors

  • http://www.oswiecimiak.pl/index.php?nr=41789 zakładanie spółek

    Hello, you worn to compose magnificent, on the contrary the last not many posts have been kinda boring… I skip your great writings. Historical some posts are just a insufficiently fragment out of track! extend on!

  • https://ledbulbshop.wordpress.com/ LED Bulb Shop

    Hey this is a good looking blog, is wordpress? Forgive me for the foolish question but if so, what theme is? Thanks!

  • http://sl2.hartwig.szczecin.pl/test.php?a%5B%5D=%3Ca+href%3Dhttp%3A%2F%2F163.16.118.251%2Fxo3%2Fhtml%2Fuserinfo.php%3Fuid%3D395171%3Euzyteczna+tresc%3C%2Fa%3E Lavera Fondaw

    Keep up the fantastic piece of work, I read few blog posts on this site and I conceive that your web site is really interesting and holds circles of wonderful information.

  • http://arthritisreduction.com/node/327615 Rolando Sully

    Hi there, You have performed an incredible job. I’ll undoubtedly digg it and for my part suggest to my buddies. I’m certain they will likely be benefited from this website.

  • http://www.youtube.com/watch?v=0-JBc001nXY painful fails

    The details talked about within the post are some of the ideal out there

  • http://arcsoluciones.cl/sitios/rodrigoAvello/wordpress/?attachment_id=37 Marion Garriss

    Itˇ¦s really a great and helpful piece of information. Iˇ¦m happy that you simply shared this useful info with us. Please keep us up to date like this. Thanks for sharing.

  • https://www.facebook.com/led.lamps.shop LED Lamp Shop

    You’ve got a good weblog here! would you like to produce some invite posts on my site?

  • Pingback: iherb coupon

  • Pingback: DS Domination Scam

  • http://www.richmanteam.net/index.php/member/270391 ray ban sunglasses with price

    Tiffany Diamond jewelry accessible.Then you definitely will be able to decide on upwards only one you might be inclined to help you to have. Tiffany comprises of encouraged quite a few remain to your instruction because of Precious jewelry creating behaviour through heritage helping to make? Tiffany silver plate bracelets an incredible impressive enterprise.Diamond jewelry motivated merely by Tiffany visions to scan a elegance plus high quality while in the relied on Tiffany merchandise,discover more about HERE

  • http://kuponkodum.blogcu.com/indirim-kodu-nedir/19773939 indirim

    Its really good to share on my social accounts.

  • http://www.gettinghitchedphotography.com/ Why not check here

    cheap tiffany braceletscontains a wide array of rings for the marriage; engagement jewellery, pendants, engagement rings etcetera. Bridal costume outfit earrings is undoubtedly kids crafts from a huge selection of elements as well as tone conjunction; gold plated or even precious metal coated along with gemstones and additionally rocks,where can i buy tiffany jewellery,in different colour formula which often adding a contented magnificence back.

  • http://http//www.lampk.com LED Bulb

    Thank you for creating this website so easy to find info. good stuff. Saving this one for later.

  • Pingback: Eye Contact

  • http://LesbianCams.org/ lesbian cam

    I’d ought to examine with you right here. Which isn’t some factor I generally do! I very like reading an short article which will make individuals really feel. Also, thank you permitting me to comment!

  • http://www.lampk.com/led-bulb-shop.html LED Bulb Shop

    Hmm i hope you do not get annoyed with this question, but how much does a site like yours earn?

  • http://BustyCam.net/ big tits webcam

    À quoi bon ne pas exposer les vérités déclarées la semaine passées par l’état national? Au minimum on aurait la possibilité de chicaner avec les véritables indices.

  • http://www.istudypm.com/article.php?id=38305 subway surfers hack

    Greetings from Los angeles! I’m bored to death at work so I decided
    to check out your blog on my iphone during lunch break.
    I love the information you present here and can’t wait to take a look when I get
    home. I’m shocked at how quick your blog loaded on my
    cell phone .. I’m not even using WIFI, just 3G ..
    Anyhow, awesome blog!

  • https://www.youtube.com/watch?v=JMl6_0jPaGk&hd=1 home remedies keratosis pilaris

    Keratosis Pilaris (KP) is usually a genetic epidermis problem in which affects 40% in the world’s human population. KP shows up being a bunch connected with modest red-colored blobs which have been normally located on the top a part of your arms, lower limbs, rear and a lesser amount of typically for the face, that could be wrongly diagnosed for zits. While there isn’t any cure regarding KP, you can find solutions to treat it. We can explain to you how.

  • http://basket.net.ua/knowledge/index.php/%D0%A3%D1%87%D0%B0%D1%81%D1%82%D0%BD%D0%B8%D0%BA:EduardoMutch add skype credit to someone else’s account

    Heya i’m for the first time here. I found this board and I find It really useful &
    it helped me out a lot. I’m hoping to present something again and help others like
    you helped me.

  • http://CamGirls.ws/ girl cam

    my sister loves the tv series Ghost Whisperer but i do obtain it a little distracting sometimes,,

  • http://www.chphealth.net/index.php/entry/is-this-really-the-time-for-a-cold.html locksmith fulham

    The very crux of your writing whilst appearing reasonable in the beginning, did not sit properly with me personally after some time. Somewhere throughout the sentences you were able to make me a believer unfortunately just for a while. I however have got a problem with your leaps in assumptions and you would do well to fill in all those gaps. In the event you can accomplish that, I would definitely be fascinated.

  • http://led.lamp.capital LED Lamp Capital

    Sometimes I contemplate if folks truly take time to publish something original, or are they only just dishing out words to fill a site. This surely doesn’t fit that mold. Thank you for taking the time to write with awareness. Now And Then I look at a page and question whether they even proofread it.Fantastic work with this article.

  • http://www.whereto-buygarciniacambogia.com where can i buy garcinia cambogia extract

    I appreciate, trigger I identified exactly what I was in search of. You have ended my 4 day long hunt! God Bless you man. Possess a wonderful day. Bye

  • http://tecnodialogo.com.br/talento/blog/view/81437/what-you-need-to-know-about-using-wordpress Brandi Thulin

    I’m curious to discover out what weblog system you are utilizing? I’m having some small security problems with my latest web site and I would like to find something more risk-free. Do you’ve any recommendations?

  • http://xunmeng.org Check HERE

    tiffany discount jewelryaddresses an array of expensive jewelry on your wedding party; bridesmaid earrings, earrings, jewelry or anything else. Bridesmaid outfit pieces of jewelry can be ideas in a very wide variety of fabrics as well as color choice collaboration; silver coated or perhaps silver precious metal plated by using crystals plus brick,http://www.timedancercorporation.com,a number of coloring collaboration which often putting a cheerful natural splendor back.

  • http://www.connectdirector.com/articles/Connectdirector-offers-partnerships-to-enterprising-general-managers networking online portal

    My compliments, helpful create-up and an superb web site. Also your post has inspired me to begin writing on issues similar to what you are carrying out. We are creating a premium online portal a specially-developed web site that brings info collectively from diverse sources in an uniform way. The Connectdirector Online Portal – marketing networks & match creating group portal is professional networking on the Connectdirector “all in a single” premium web portal offering company networking & social networking, contacts, matching, on world wide web content material, (web) advertising & (organization help) solutions. An special multi-language world wide web portal notion with a international exposure and a nearby focus on each wealthy high higher high quality online content material and dynamic database generated listings for matching private interest, enterprise interests and social interests and wants. We at Connectdirector advertising networks and community portal are an match creating authority in guiding and decreasing barriers by direct linking organization and social interests and needs interests on the principles of joint outcome, integrity, compliance and excellence. Summarized Connectdirector is Networking, Contacts, Matching, Content material, Advertising & Solutions.If you did not visit our website but and/or you are not a member, then please sign up as we truly want to know your thoughts so we can increase our on the web portal. On our web site you can begin straightforward to create your network contacts!

  • http://forum.bkav.com.vn/member.php?356146-Annettesisbiz jakikantor

    It’s really a great and helpful piece of info. I’m glad that you shared this useful information with us. Please keep us up to date like this. Thanks for sharing.

  • Pingback: iherb coupon

  • http://dvdcases.net DVD Cases

    Hello, I enjoy your weblog. Is there something I can do to get updates like a subscription or something? I’m sorry I am not familiar with RSS?

  • http://cfcc.co.uk/ ralph lauren on sale

    tiffany discount jewelry could possibly be nicely understood to be Fine jewelry comprised of economical alloys and then pretend or maybe semiprecious pebbles. Furthermore, it called type earrings, garbage fine jewelry and yes it intended is made being more cost-effective and inexpensive just for repurchasing so that they can in shape a wonderful along with cutting edge attire fashion.they are primarily constructed from low cost ,buy tiffany jewelry,precious gems that include rhinestones and inside mix, gold jewelry plated steel

  • http://profesjonalne-tworzenie-stron-www.eu/jakikantor.html ranking kantorow online

    Great post and right to the point. I don’t know if this is actually the best place to ask but do you people have any ideea where to get some professional writers? Thx :)

  • Pingback: plumbing glen burnie

  • http://jkcbixnf.hrmruqtidt.xpqgimn.qypvthu.loqu.forum.mythem.es/aqqqutvv Devon Fredregill

    I like this site very much, Its a really nice situation to read and incur information. “There’s nothing I’m afraid of like scared people.” by Robert Frost.

  • http://www.youtube.com/watch?v=BIzzC-nbX2k funny commercials

    usually posts some very exciting stuff like this. If you

  • http://www.mundoknet.com/gerador-de-visitas-gerador-de-trafego-demonio/ Seguidores

    I like this internet site pretty significantly so considerably fantastic information and facts.

  • http://www.interiordezine.co.uk/ray-ban-c-726.html ray ban sunglasses cheap

    Colouring has a primary job in a very prom dress while in the distinctive day. It must accompany skin skin. For the complementing photo, it is possible to showcase a person’s figure with the use of weight loss tones for example homemade wine, strong bleak, natrual enviroment green, late night azure, wine red, cacao, along with the neutral colorations involving bravo, black, greyish, magic, yellow metal, as well as myope. Prom dresses are likely to be formal bash gowns, extensive in addition to naturally breathtaking. cheap yellow prom dresses could be based on the design of your social gathering or even they can simply be common ball clothes. There is absolutely no classic method to specify this “best prom dress”. It is the one that tends to make you sense wonderful and convey the right image-sweet, innocent, attractive or even amazing. The favourite prom dresses are silk, sequined, vintage styles, small black dress, the actual asymmetrical sprained ankle treatment dress, a hanky hem sprained ankle along with the classic Cinderella soccer ball wedding gown.

  • http://www.acai.com.sg/acai-berry-juice-singapore-links acai berry juice singapore

    You really make it appear seriously effortless together with your presentation but I in acquiring this matter to become essentially one thing that I assume I’d by no implies recognize. It type of feels also complex and very massive for me. I’m looking ahead for your subsequent submit, I¡¦ll attempt to get the hang of it! rentacarkosovo

  • https://www.youtube.com/watch?v=6hRi9rP-d7Y investing in gold and silver

    I got what you mean , saved to fav, extremely good world-wide-web site .

  • Pingback: junior archery academy

  • http://www.youtube.com/watch?v=Dtp-0MmQVNE big trucks

    Here is a superb Blog You may Uncover Fascinating that we Encourage You

  • http://www.postdvor.com/user/FelicianisOl/ kawa lavazza ziarnista

    I am extremely impressed with your writing skills as well as with the layout on your blog. Is this a paid theme or did you modify it yourself? Either way keep up the nice quality writing, it’s rare to see a nice blog like this one these days..

  • http://hire.lt/dig/story.php?id=243737 Colton Whetstone

    Perfect blogging site you have here! Just how can i put this site’s feed to my Rss or atom reader?

  • http://www.youtube.com/watch?v=ZkjP_u8iI9s For Sale By Owner Seattle WA

    pretty nice post, i surely definitely like this fabulous web page, hold on it

  • http://www.biobagusa.com/biobag_dog.htm buy viagra

    here are some hyperlinks to internet sites that we link to for the reason that we think they are really worth visiting

  • http://www.petsmart.com/dog/waste-disposal/cat-36-catid-100113 buy viagra

    we came across a cool web page that you just could possibly take pleasure in. Take a appear in case you want

  • Pingback: Crete Carrier Corporation

  • http://www.drbethell.webspace.virginmedia.com/?a%5B%5D=hunting+agency+in+poland+%28%3Ca+href%3Dhttp%3A%2F%2Fbloxorz2.net%2Fprofile%2F214637%2Fvisteadman%3Elook+at+this+now%3C%2Fa%3E%29 hunting agency in poland

    I believe that is one of the most significant info for me. And i’m happy studying your article. However wanna statement on few normal issues, The web site taste is wonderful, the articles is truly excellent . Excellent job, cheers.