An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Just had the host on the moneyman radio show ask Jim Rogers how can you short US govt bond when the Fed has said they will keep interest rates low until unemployment is below 6.5% Host said the unemployment rate may never go below 6.5% again so what is your time frame for shorting bonds. Rogers said " 2 days to 3 years, but I have been wrong shorting govt bonds before. Eventually the market will overwehlm the central bank, as the markets lose confidence in the bonds." I believe the USD currency index DX will overwehlm any central bank operations, IE. Japan,s attempt. What happens to US treasuries if the USD crashes, what happens to UST if USD rises up to the 100-102 yen cross? Rodgers said shorting treasuries is a hedge on his portfolio. He owns hard assets farm land etc. He is ringin the opening bell in about 30 minute today Friday.
Great video, Mike. Agreed that the bond market is anchored by the Fed, which isn't going to change its easy policy stance any time soon. The question is how much could bonds "bounce around" in the meantime? The Treasury yield curve is already pretty steep at approximately 300 basis points (30yr less the 2yr). However, it has been as steep as 400 bps in the past. So even if the Fed stands pat, the 30yr bond yield could conceivably rise another 100 bps, which would translate into a price drop of about 15 percent. Don't get me wrong, Jim Rogers is an idiot. But that's not pocket change.
3 comments:
Just had the host on the moneyman radio show ask Jim Rogers how can you short US govt bond when the Fed has said they will keep interest rates low until unemployment is below 6.5% Host said the unemployment rate may never go below 6.5% again so what is your time frame for shorting bonds. Rogers said " 2 days to 3 years, but I have been wrong shorting govt bonds before. Eventually the market will overwehlm the central bank, as the markets lose confidence in the bonds."
I believe the USD currency index DX will overwehlm any central bank operations, IE. Japan,s attempt. What happens to US treasuries if the USD crashes, what happens to UST if USD rises up to the 100-102 yen cross? Rodgers said shorting treasuries is a hedge on his portfolio. He owns hard assets farm land etc. He is ringin the opening bell in about 30 minute today Friday.
Great video, Mike. Agreed that the bond market is anchored by the Fed, which isn't going to change its easy policy stance any time soon. The question is how much could bonds "bounce around" in the meantime? The Treasury yield curve is already pretty steep at approximately 300 basis points (30yr less the 2yr). However, it has been as steep as 400 bps in the past. So even if the Fed stands pat, the 30yr bond yield could conceivably rise another 100 bps, which would translate into a price drop of about 15 percent. Don't get me wrong, Jim Rogers is an idiot. But that's not pocket change.
jimbo the clown's investment logic:
http://www.youtube.com/watch?v=3ur8Uohol4g
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