Bondo

Further Evidence That Inflation Isn't Imminent

CPI not withstanding, except for housing prices and apartment rents, almost everything I've been buying lately costs dramatically more. Gas, health insurance premiums, food, entertainment, kid's college expenses....

Will China Drop U.S. Debt? Unlikely

My sense is that while the Chinese et al are not eager to "dump" US Treasuries they are also not eager to load up on more either. So for this and other reasons I am still expecting long US Treasury yields to increase, modestly over the next few months, and dramatically when (if?) the economy starts cranking along again.

Stay Away from U.S. Treasuries - Invest in Energy Stocks

Michael, you make a lot of good points, but I have come to some slightly different conclusions. The most important difference is that I think increasing interest rates on long Treasuries is a far more certain outcome in this scenario than is increasing commodity prices. As Isaac has pointed out, a severe global depression might depress demand for all sorts of commodities, for example. But if things get worse the Treasure will issue even MORE bonds, and hence higher interest rates. To TBT is a better bet IMHO.

By the way, I'm an electrical engineer and I wanted to make one correction. When an electrical circuit gets hot and the resistance goes up the circuit will typically draw less current and stabilize. Thermal runaway occurs when a circuit draws more power when it heats up. If things were only so well defined in the investment world. ha.

Phil

China's Statements About U.S. Debt Are Overblown

You make some good points John. And I think that China will indeed start to consume more of their own products over time. That's good for them. The anti-business environment in Washington DC is very troubling from a long term business development standpoint. Even if the stimulus spending can eventually be curtailed I think it is unlikely that our small businesses will start to mint jobs unless the government can appeal more directly to the greed ("greed is good") instinct of entrapraneurs and investors. Tax the rich is just a killer.

Bond Expert: Wednesday Wrap

Popey,

I think you've distilled things down pretty well. We all know what GM bonds are selling for now, and they're not even bankrupt yet. haha

Phil