carey_jim

Bond Expert: Friday Wrap

You've left out economic fundamentals:

How can the United States Government continue to borrow money at confiscatory rates?

While the dollar continues to drop and inflation accelerates, interest rates should rise dramatically, on their own.

The free market system can't be held in check forever by Government fiat.

To add insult to injury the Free Market (sic?) US is putting pressure on the Totalitarian Chinese Communists (sic?) to raise the value of the Renminbi against the dollar.

It's no secret that the Communists are artificially holding down US interest rates below market values by buying US paper money at very low (below market) interest rates.

What rational investor would buy Treasury Bills at less than 3% yearly interest when prices are going up 7% a year or more (and, in the case of our major creditors, the Chinese, your own currency is being pressured by the US Government to increase in value against the dollar)?

Economic fundamentals are telling the US that interest rates must rise dramatically to protect the dollar and keep inflation in check.

In the long run, neither the Fed nor the Communists can repeal the laws of economics.

Investment strategies should be based on economic laws and not the futile efforts of governments.

Your advice amounts to telling people to run back and forth on the deck of a ship that is careening out of control in a violent storm:

You might make money in the short run by rushing from one side to the other (and you might not) but in the end you will sink with the ship.