This is very troublesome.
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Aren’t you a small cap stock investor? Are you going to short treasuries?
To me, it would be troublesome if the yield on bonds were higher. The U.S. government is borrowing record amounts of money at record low rates. In fact, they are borrowing at nearly the historical rate of inflation. Hey, that doesn’t sound too bad to me.
What is that, 3% of China’s Treasury holdings? The bond market seems unperturbed. Zero Hedge seems to always go for the Chicken Little angle. Deflation is the proximate danger here, not high interest rates and inflation. Not yet at least.
Alfred, I’m not going to short Treasuries, not my bag.
Dave, Yes it is 3% of holdings, but if they are no longer a buyer, who is going to be buying the next $9 trillion we are going to need in the next ten years.
That is where the big concern comes from. And it can’t be the UK.