"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Friday, March 25, 2011

Long Bond a Casualty of Fedspeak

A very slight upward revision to 4th quarter GDP along with "hawkish" talk by select FOMC governors may be pushing the Dollar higher but it is not helping the US bond market on the long end of the curve.

It has dropped back within the former trading range or congestion zone that was once in place dating as far back to December of last year. You will recall that the long bond had broken out of this range to the downside in early February only to rise, Phoenix-like, from the flames by the surge in crude oil prices as unrest spread across MENA as well as events in Japan.

Since that time however, the bonds have been steadily moving lower. Keep in mind that Bill Gross of PIMCO, who sold his Treasuries because he felt yield was way too low, is undoubtedly being copied by many others. There are also many commentators and analysts rightly asking the question - "once the Fed supposedly stops buying all these Treasuries at the end of June, just who is going to step up and buy all of this US debt especially at these low yields".

While the Fed mouths may be talking up the Dollar and talking down Gold, they also are risking a rise in yields on the long end of the curve. No doubt this is not good news for the beleagured real estate market.


  1. The FED is trying to eat it's cake and have it too.

  2. dan,

    i wanted to take this opportunity to thank you very much for providing the information on your website. i have found it to be a useful second pair of "eyes" on the market, and a way to check myself as to whether or not i am correctly reading various charts, indicators, and other evidence of supply and demand in markets, specifically silver.

    thanks again for your efforts. i sincerely appreciate it!

  3. "... this is not good news for the beleagured real estate market."

    Why does it seem 99% of American does not see this coming?

  4. Any word on how long, before the usd is trading on the pink sheets?


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