mahoney

Is It Time to Short Bonds?

I like TBT too. The way I see it, we are either going to see deflation or major inflation over the next few years. It seems to me that TBT wins in either case. Deflation compounds US government debt, which diminishes the credit-worthiness of T-Bills. Inflation, on the other hand, makes the puny yield on T-Bills unattractive. Either way the 30-year bond looks overpriced. I am by no means confident about this analysis, however, and I would appreciate any commentary, especially with regards to the deflationary scenario.