lance sjogren

U.S. Treasuries in a Bubble, Not Commodities

I agree there is a bond bubble. However, so long as the US is committed to artificially depressed interest rates I see no reason why bonds will collapse in nominal value.

The bond bubble will burst GRADUALLY, the mechanism being that an annual devaluation of the dollar of 10-15% over the next 4-5 years will cause the inflation-adjusted value of bonds to drop by about 70-80%.

Jim Rogers: U.S. About to Have a Currency Crisis

I do believe massive inflation is on the horizon, but I don't believe there is any basis to know when it will kick in.

Also, we don't know what the Fed will do when inflation starts heating up.

Will they tighten the screws, even though that would cause interest rates to skyrocket and deal a deathblow to the housing market?

Or will the only politically palatable approach be to sit on the sidelines as inflation rages?

And also I strongly believe the inflation will be very uneven in where it shows up.

I can't see it causing real estate prices going up, although it might help them to stabilize in dollar value. (not adjusted for inflation)

Certainly, gold will go up. Predictions of $7000 per ounce are considered the rants of deranged crackpots. However, there have been so many outlandish things we have already witnessed in this economic downturn- who's to say a 10x rise in the exchange rate between the US dollar and gold might not also occur?