King Canute and the Bond MarketInvestment Conclusion
The US Treasury is increasing purchases of long-term Treasuries. The stated objective is to improve liquidity. Nobody is fooled. The aim is to control and lower long term US Treasury yields. The policy is ill advised. It won’t work. It weakens the US$. It prolongs and worsens credit bubbles.
• Be long real assets: agricultural, energy and gold.
• Be short the US$ versus the RMB, A$ and SGD.
• Be short US Treasuries and JGBs. If you want a sovereign bond long, I can’t find it.
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