U.S. Treasuries Should Be Bought, Not Sold

MKC_Global's picture

Contrary to very popular opinion and in
conjunction with their 30 year bull market, buying U.S. Treasuries could be the
best investment of 2011. Few times in history has an investor been able to
invest with a major trend and simultaneously be a contrarian. When these
opportunities arise, they must not be passed over.


This investment opportunity holds three major
drivers. First, U.S. Treasuries hold the benefit of a safe haven during a stock
market decline and periods of uncertainty; if they naturally resume their
upward trend, any market sell-off could accelerate the upward move. Second,
they remain in a massive 30-year bull market; major bull markets tend to
continue further than expected and well past traditional valuations. Lastly,
buying U.S. Treasuries is a major contrarian play; an overwhelming majority of
analysts and fund managers loathe this asset. Rarely does an investor see an
opportunity with so many factors simultaneously available: the synergy aspect
could be impressive.


This investment view on Treasuries isn’t common.
Often professionals and amateurs alike state the following reasons why a
continuation of low rates and a Treasury bull market are impossible: government
bonds are in a bubble, inflation is just around the corner, the government is a
debt junkie with an out-of-control deficit, and the U.S. dollar is going to
devalue into oblivion. The data these bond bears lean on isn’t necessarily
wrong-they just have the timing incorrect. At some point interest rates will
absolutely rise for a prolonged period. It just won’t be right now. So, I don’t
disagree with the critics-I disagree with their ability to time the trade.


A Safe Haven


Government bonds are traditionally considered a
conservative and safe investment. When the stock market sells off or a crisis
occurs, bond prices will rally as investors seek a safe haven. During the
recent Japanese tsunami crisis, government bonds around the world advanced
quickly. They proved to be a haven during 2008’s financial crisis, during the tech
bubble collapse, after 9/11, and after the 1987 crash, as well.


The United States is smack in the middle of a
secular bear market, although most wouldn’t know it after a spectacular
two-year cyclical rally. When stocks again work their way lower during this
secular bear market, growth investors will be looking for returns, and
conservative investors will be looking for yield and/or a vehicle to preserve
capital. U.S. Treasuries seem to be the most obvious vehicle to satisfy both
types of investor. Treasuries played this role like clockwork during the last
two stock market declines in 2000-2003 and 2007-2009. With yields at almost
4.5%, 30-year Treasuries are actually quite attractive from a yield
perspective, as well.


Using current
earnings, the P/E ratio of the S&P 500 stands in the top 10 percent of all
historical valuations. Poor stock market performance always follows
historically high P/E ratios. Data shows the average 10-year inflation adjusted
return following a top-10% valuation period as an entry point is less than -8%.
At this point in time, stock market investors should certainly expect sub-zero
percent returns over the next decade.


30 year Bull Market


“The trend is your friend until it bends in the
end.” This cliché about markets is dead on. U.S. Treasuries are in a massive
30-year cyclical bull market. Yes, it may be nearing the end of its life; it
just is not quite there yet. The interesting quality of long-duration markets
(either up or down) is that they typically blow right through reasonable
valuations before ending and reversing. Reasonable valuations can help one get
into a market initially but historically will get an investor out of an
investment too early before the market reaches an absurd valuation (like
Facebook.com currently being valued at over $70 billion?). The point is that
relying on fundamental data such as inflation or government deficits at this
late stage of the bond bull market is almost a waste of time in regard to
timing the end of the move.


Even if I’m wrong about fundamental valuations
being useless at the end of a cyclical bull market, it is clearly evident that
there are numerous historical precedents for higher bond prices. Here in the
United States, 10-year government bonds saw a low in yield of about 1.5% in the
1940s, and Japan saw a low for the 10-year JGB at about 1%. The current U.S.
Treasury yield stands at 3.65% and a bond value of about 119. If the U.S.
10-year note falls to a yield of 1%, the bond price will rally to over 140-a
massive 17% rally. To put that trade in perspective, if the MKC Global Fund
assumed a standard conservative position size in the 10-year note and yields
dropped to 1%, our fund as a whole, not just the individual trade, would earn
about 18%.


Contrarian Quality


The most blatant aspect of the bond trade is its
contrarian quality. To say I hold a lonely view is an understatement. I know of
only two major fund managers who prefer to buy U.S. Treasuries instead of
shorting them. For example, recently CNBC hosted one of the many individuals
preaching the idea of shorting U.S. Treasuries. This man is the chief
investment officer for a firm that manages $2 billion, and he was quite vocal
about shorting the asset. Fortunately, there is nothing special about this
since seemingly every day CNBC and Bloomberg interview individuals with
identical views.


Parting company with the crowd is never
comfortable. Luckily, the logistics of a contrarian investment are quite
simple. If the vast, vast majority of market participants hold the same view and
is subsequently on the same side of the trade (in this case own zero government
bonds or short them), any movement in the assets price away from those
participants will result in their sustaining losses and unwinding their
positions. It’s comparable to betting the underdog (that’s actually a superior
team) in sports and receiving points.


Lastly, Bill Gross, who manages Pimco’s $257
billion Total Return Bond Fund, made a bold move by reducing the fund’s
holdings of U.S. Treasuries to zero. He sold them all. That is a dramatic
stance, and the market will punish him for it by running up Treasury prices and
forcing him back into the market at higher prices. He has a slew of
high-profile advisors, including past Federal Reserve members such as Alan
Greenspan. These people help tremendously in determining the fundamental
valuations for U.S. Treasuries. But, as shown earlier, that fundamental
information is useless at this stage, and an advisory board of that caliber can
only be for show.


Bill Gross certainly isn’t alone. Other major
market players who are either short U.S. Treasuries or maintain a negative view
and won’t buy any time soon include: Warren Buffet, Marc Faber, Jim Rogers,
Nassim Taleb, and John Paulson. Again, these are only a handful of individuals,
but they collectively manage more than $300 billion. It is unknown how much
capital Marc Faber, Warren Buffet, and Jim Rogers influence with their
financial views.


Buying U.S. Treasuries
should prove to be a profitable investment. Certainly, nothing is a guarantee,
but the risk reward ratio for this asset is heavily skewed in the proper
direction. Investors face an investment environment where, starved for yield,
they have been forced to speculate in stocks. When stocks begin to decline,
Treasuries will become their asset of choice. The contrarian component of this
opportunity only creates a more exciting scenario for investors, as long as the
masses don’t incorrectly convince them otherwise.

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drivenZ's picture

Wow, bad article or worst article? I cant decide.


You’re going to stake your reputation on the reasoning that “treasuries are in a 30 year bull market”? Good luck with that. 

Au_Ag_CuPbCu's picture

"overwhelming majority of analysts and fund managers loathe this asset." No shit!

Seriously?  This is a joke, just because these morons get one right doesn't make this a great contrarian play.  A broken clock is right twice a day.

Elmer Fudd's picture

Completly disingenious.  I know of a "normal" bond manager, her shop still buys treasuries, so what's with the lonely call bit, here at ZH where the non-traditional views prevail?  What about maturities?  Goofball buying 2 years, 10, or 30's?  If you're managing for the traditional bond-buying crowd, you are doing ladders?  Again what is the average maturity of the ladder?  Smells like rotten fish, using the flight to safety argument; we all know it could rally if TPTB crashed equities.  But if you're just placing a bet based on "contrarian qualities," then you really aren't a regular bond buyer buying for the risk-adverse crowd.

ShankyS's picture

IMHO - post from the buy side that can't see the light. Keep pumping the masses boyz. I guess everyone needs someone to sell to.

AchtungAffen's picture

The Emperor has Paper Clothes

ebworthen's picture


What about TIPS?

I think I hear you arguing that the risk premium for Treasuries is low compared to equities and commodities (?).



magne13's picture

Not sure about Tips, that is an investment tied to the governments perception to inflation, I do not trade those.  Yes risk premia is low compared to equities and commodities, however you could go long either of those and value them in something outside of the US dollar.  Commodities have turned into a large asset class basically through ETFs and that will end very badly as well, leveraged money in an electronic world can very easily manipulate the price of anything.  Sniff out the weak hands, buy or sell till someone else besides you is doing it,than you have them.  Take profits off the table, rinse and repeat as they say.  todays markets are no place for amateurs, commoners or the like, for eventually the house takes all the money and there is no one left to play...

Mountainview's picture

Well, the FED is doing the whole buying anyhow. Why should we simple public buy these bonds at these low rates ???

magne13's picture

Mountainview, the United States is no different than Japan.  they have had low rates for a long long time, the U.S. is on the exact same plan, do not fight it, the way I see it, is that the actual bond or cash treasury is like the SPY ETF a very good short vs the future.  Many large players are just beginning now to catch on to the game, sell the actual treasury bond, buy the futures properly weighted and enjoy the run up.  I agree the dollar is going to be debased, yet in actuality there is nothing any of the other currencies do differently they are all the same (fiat).  It is a dollar problem and its not our problem, its everyone elses that we sold outs problem.  The FED knows this and this is why they can do it.  Yes Gold will go up proportionally, commodities will go up, yet be more volatile, but one thing is certain, The FED will and cannot raise rates of any kind, for they know the one thing they cannot buy and reap the immediate rewards of, and that is time.  They are buying time, time to allow the accumulation of money supply, multiplied by the natural velocity of money to wither away at the very assets that are all over valued in current dollar form.  The United States will have 0-.25 fed funds for the next 3 years, the 10yr rate will be 2% and the 30yr rate will be 3%.  All the idiot analyst economist who clamour for 3.5% or higher GDP and growth are based purely on the FED maintaining the course and artificially supporting an economy that cannot be taken of the steroids just yet.  Bernank is not fooling me and he certainly is not remaining silent on their plan, they will print until they don't have to, thats the bottom line.  Now I am not advocating bonds as the best investment, but in no way in hell is the bull run over, thats for sure.

Mountainview's picture

Yes, but you see an end point in 3 years. I can't see this final point...but a final explosion...of either prices, the US$, international trade or all of them together...? Obviously the FED has no alternative...

ghostfaceinvestah's picture

I actually agree with this post, I find ZH is getting back to what it was in the old days, sadly, a bunch of one-minded posters who follow each other into the abyss, back when it started the site was full of deflationists who thought the stock market was going to crash below S&P 400 any day, while some folks like GG and I saw the Fed money printing and piled into commodities and gold.

Now, everyone on this site is a gold bug and believes we are heading for hyperinflation.  We may be, but not yet - once the money printing is done in June, we will see a risk-off trade and flight into USTs.  Why would this time be different than last spring?

AFTER the Fed realizes they have no choice but QE3, 4, 5, etc, that is the time to short USTs and go long gold, NFLX, etc again.  But for now USTs are not a bad trade, I am starting to go to cash now, and will buy some USTs, to beat the crowd before June.  This week is as good a week as any with all the POMOs over the next few days.

bbpitcher30's picture

Watch out if QE2 ends and we do not address deficit ceiling properly.  What can happen?  I copy the following from my blog (Economics501.tradepress.com):

In response to a post (www. http://www.returntoexcellence.net/), I state that the US may be seriously debating the Fair Tax (FT) in a very serious way come Q3 2011.

Pass this year?


U.S. financial circumstances may present a FT opportunity Q3 this year. How?


Consider that


1 – US requires additional $4-5 billion per day to finance its debt

2 – Federal Reserve has been financing perhaps as much as $4 billion per day since November 2010.

3 – Private estimate US consumer inflation range from 6% to over 10%.

4 – US main creditors (besides Fed) China and Japan are in process of decreasing their US treasury holdings

5 – IMF and G20 are actively assessing alternatives to the $ as global currency

6 – S&P lowered their expectations regarding US debt risk

7 – Odds are low that Congress will pass a deficit reduction measure as part of debt ceiling extension that will increase the confidence of our creditors and the IMF/G20 in the risk of investing in US Treasuries.

8 – Fed repeatedly states that it will stop printing $’s to purchase US Treasuries (end of QE2) June 30.


If 7 and 8 occur, expect the 10 year Treasury Bill to jump from 3 ½ % to over 6% in a week. Without the Fed, interest rates will automatically go up to reflect real inflation with pressure to jump to over 10% week 2 given risk of poor returns (per falling $) or outright default.


The first few days of such a scary but very possible crisis may result in an emergency session of the world’s (yes – G20 and IMF) involvement in addressing a high probability of a $ collapse. Here is where the FT may present itself as a significant and immediate measure to stabilize the $. How:


A – via 0% federal corporate tax rate, position the US overnight as an entrepreneurial friendly haven. Foreign and domestic investors and venture capitalists would plan to take advantage of this; hence $ would stabilize.


B – save $450 billion per year (reference: economist Art Laffer) due to abolishment of the IRS. That $ reducing the debt will result in more private entrepreneurial opportunities.


A & B may then prevent an economic Armageddon and offer the US with another opportunity to fix its financial house. This would entail cutting bloated government and privatizing bankrupts entitlements.


Let us then make the case positioning the FT as a serious 2011 alternative.


For more details about threat of US Dollar collapse please read my review of Damon Vickers Jan 2011 book “Day After the US Dollar Collapses” http://economics501.wordpress.com/2011/01/

alexwest's picture

# economist Art Laffer

he's not economist , hes stupid asshole
watch his debate w/ peter schiff on youtube


bbpitcher30's picture

does not matter.  Many have estimated IRS and our rquired tax accounting costs at least $300 billion a year.  Can you name any ways our current tax code helps to grow the economy, with its special interests and crony capitalism.  Fair tax offers a free market capitalist approach proven to grow the economy with real jobs that are determined by supply and demand, not governemnt bureacrats.

alexwest's picture

#Can you name any ways our current tax code

wrong... before curing disease, you must understand the causes ...

its too trivial to re-shuffle taxes and somehow by magic economy will grow...

current US problems is not tax code, to be fare
USA dont have that much of tax burden.. most of Europe coutries have taxes are over 50$% of gdp..

US problems are

#1 Inadequate political system.. there's not much democracy here.. 2 same parties, same people .. USA became monarchy.. Bushes, Clintons , etc..

#2 business
business has to much political influence, v.v. different from Europe.. USA must stop all political contributions from business. none..

#3 financial deregualtion from 90x and debt economy

too much debt, too much financial speculation..

#4 most important
PEOPLE.. BECAME LAZY, STUPID, v.v. ready to engage in any kind of speculation.. houses/ offshoring/etc too much thinking about how make a quik buck..


bbpitcher30's picture

i agree with most of your points.  FT is not cure all but step in right direction.  It may be an option to stabilize our dollar if dollar starts to collapse post QE2 and with a poor COngressional response to debt ceiling extension.  Note however that a QE3 is possible because who will buy T bills if Fed stops?

gerryscat's picture

This guy might actually be right: remember, the world is ruled by the Assholes and their faithful, the Morons. We live in a paradise yet so many suffer or lead (at best) mediocre existences, all because the Assholes (in charge) and the morons (who do what they are told). Anyway the result is: up is down and down is up; stuff that should never happen does. The Morons might just pile into Treasuries, stupid, stupid, Morons.

alexwest's picture

let me get this straight..
there're ~10 trln of outstanding, tradable USA note/bonds/etc

each and every next year US treasury is going to isuue at least 1.5-2 trln $ more.. that makes 15-20% new supply 4ever and this asshole says buy US gov bonds/notes/etc..

does he an idiot ?

MaxFrost's picture

Buying the TLT whenever it dips into the 80s, selling in the high 90s has been a pretty great trade the past couple of years. I think it was William Bonzai had a graphic last year, based on the movie The 300, only it was Bernanke's head on a Spartan's body saying "They shall not pass!", only he called it "The 400". As in bps.

TLT's a good hedge. Beats the heck out of shorting the S&P. The 4% or so yield sucks - except when you compare it to cash.

I like the TLT, when it's cheap. Wouldn't touch the actual bonds with a 10-foot pole.

cranky-old-geezer's picture

The article and positive comments here apparently assume a relatively stable money supply.  If that was the case then yes, they would have a point.

But a relatively stable money supply isn't reality.  A rapidly expanding money supply is reality, reducing the maturity real value of those treasury bonds significantly, with longer maturities suffering the most real value loss.

What good is 3.5% yield when you lose 50% purchasing power by maturity due to a doubling of the money supply?

Bernanke is going to debase US govt debt away by debasing the dollar.  He's made that very clear in his actions while denying it in his words.

That's what treasury bond bulls fail to understand, or understand but refuse to acknowledge.

Fine.  Whatever.  Let them carry on.  And watch Bernanke (and his successors) debase  the value of their investment down to nothing.  Or close to nothing.

Bill Gross may jump back into treasuries after the Fed's soon-coming liquidity shock dashes bond prices. But only because he can flip them to the Fed for a profit when QE starts back up.

This pattern isn't new.  We've seen it before.

Whatta's picture

With yields at almost 4.5%, 30-year Treasuries are actually quite attractive from a yield perspective, as well.

oh yeah, spank me...harder...harder....yeah, yeah!!!!!!

I love getting rates below inflation AND giving the money to an irresponsible bunch of can-kicking hypocrites.

Clowns on Acid's picture

Love it when somone has the ballsack to provide a contrarian viewpoint, and face the guffaws of the ZH characters lined up as extras at the bar of Star Wars movie. Essentially the author is saying "don't fight the Fed". The Fed will go to the printing presses to crush the "specs". raise matgins on the 10/30 yr futures? 

Completely disagree with the authors premise, based upon:

  1. Real interest rates - AAA Corporates (multi billion $ cash balance sheets) yielding similar or higher yields.
  2.  Any whiff of a Greece restructuring will see a greater divergence into German and Scandi bonds. (2 tier Euro).
  3. Chinese bond market becoming more mature as an alternative.
  4. It's all fiat, it is just that some FX is more fiat than others.
cbaba's picture

This is total Crap..

How much did you get paid by FED or their banks to write this article MKC Global guys ?

You don't even have the name of person who wrote this...

If there was a negative 5 star  i would click that one, you are lucky that i gave only 1 star for this..





falak pema's picture

well since you've starred in 'a handful of dollars' you sound pretty stingy to me...Be magnanimous...

Cone of Uncertainty's picture

US Treasuries and the USD--the turd stinks at both end bitches.

Sure, play with fire for a little short term piling up in UST if equity markets collapse, but such a move will be so short lived, so violent and extreme in its price action, that the only people that will make money on such a stupid fucking trade will be those that were blessed with shear fucking mega luck rasied to the power of a googleplex.

Investing in such a manner is for fucktards, doucheturds, and Bernanke ball washing scrotum gobblers, of which the author is one.

SkySavage's picture

Also agree.  He is trading the end of QEII.  At the end of QEI, the 10y touched bottom at around 2.40%, while the market tanked.  Treasuries led the market by a bit in 2010, and are doing so now.

High Plains Drifter's picture

would you agree , we are in a commodities bull market now?  and on this very blog from time to time, tyler prints up the yearly PM rates of return compared to other "investments"  sir, what is the yearly rate of  return on treasury notes?  hmmm?

throughthewire's picture

I fully agree. The inflation hawks are forgetting that world wide debt denominated in dollars is so large it can never be paid back. When that bill finally comes due dollars will become vary scarce. The dollar will strengthen beyond anyones expectation. US bonds will do very well, even better than they are now. I like zero coupon treasuries, 15 to 20 years out. The return on zeros will be very impressive.

Bam_Man's picture

I also agree and have been a buyer on dips of zero-coupon Treasuries with maturities in the 2025-2028 area for the past two years.

Many fail to appreciate that ZIRP is PERMANENT (until the dollar-as-reserve-currency financial system collapses).

Many also fail to appreciate that the mass migration of retail/retirement investment $ out of (near zero yield) bank deposits and money market mutual funds has only just begun. This will place a solid bid under long-dated UST's for at least the next several years.


High Plains Drifter's picture

you have to be kidding me. is that you mish?

throughthewire's picture

No, I'm not mish and no, I'm not kidding.

cocoablini's picture

Any return- even zero - is better than the shortterm rate plunging below zirp- real rate.
The banks will be tying to spray money or even charging for saving.
But the quality of borrower will prevent inflation in overall money supply- which is credit and asset valuation. The people who can borrow won't. Not in deflationary depressions thy o. And nobody will lend to losers. So credit stalemate

magne13's picture

Sorry boys, but I agree with him.  See the reality of this all is the US bond market can go higher in price lower in yield indefinitely.  I am not sure if anyone has noticed, but finance is not what it used to be, a pure example is a country can simoultaneously double its debt load and lower the very interest payments it pays.  This is not how bonds and interest are suppose to work, the rate of interest relative to the size of debt is not the only measurement of worth.  Why don't you look at the fiat system that has the entire globe in shackles, look at the size and amount of monetary printing thats been going on.  If you think for one instance that the entire globe trusts anyone else, you are sadly mistaken.  If there has been one constant in this world over the last 70 years, that is the United States is by far the safest place to run when $#%! hits the fan.  So for all of you who know that this entire financial ponzi game is going to end badly, then why shun the very investment that every dog runs to with their tail between their legs.  Although I don't agree with their math especially the return bit, for buying 10's at 3.50 and selling them at 1.00% is a far greater return than 17% but of course time and actually selling there are two different things.  All I know is something is up and if you honestly think that rates are going higher for any sort of sustainable time period than you mine as well be brainwashed by the very people that Zero hedge looks to expose.  You all realize the FED can put a ceiling on long term rates don't you? In fact they already have and that is 4.5% in the 30yr and moving lower with each year until asset prices align with sustainable long term growth and affordability trends.  Trust me when I say, that all things go up in price, until they don't.

Kayman's picture

that is the United States is by far the safest place to run when $#%! hits the fan.  

Wrong !

At one time the USA was the manufacturing center of the world and the world's largest CREDITOR NATION.  Now the USA is the WORLD'S LARGEST DEBTOR NATION.

The platform upon which you stand is infested with conjuring termites.

The short term is anybody's guess but exponential growth in debt with stagnant economic growth is a recipe for disaster.

Navigator's picture

I think you're forgetting that there are a bunch of immature and inexperienced teabaggers with home skooled edumacations in Congress right now who very much want to cap the debt ceiling, cause a U.S. default and blame it on Obama.

THAT...is what Gross, Soros, Faber, etc, are betting on.

bulldung's picture

Careful there who you mock Navigator, the homeschooling cohort now consistently outperforms on standardized testing. Historically, kings and elites have home educated.

DeadFred's picture

There is little doubt what you say WAS true and may continue for some time, but the 'flight to safety' value of the dollar and bonds has been miniscule thus year.  Make a case that massive tsunamis MENA uprisings an impending sovereign defaults aren't enough to cause a real flight to safety... maybe.  There are big cracks visible in the support structure you discribe.  I won't be betting anything trying to get that 17% upside when it looks like a collapsing house of cards could bring a huge downside. You may be right that the fiscal situation of the US is strong and stable but it's a hard sell to me.

AR15AU's picture

I cannot morally justify investing in such an oppressive government.

falak pema's picture

don't you like Marilyn Monroe as true blue american?

AR15AU's picture

How about Betty Page ...

falak pema's picture

any dame whose been 36/24/36 gets my ticket. 

geminiRX's picture

According to Martin Armstrong theory, the next wave will involve a massive flight of capital from public sector debt to private sector debt as the sovereign currency crisis intensifies. He pretty much states you are the greater fool if you buy into government instruments. I have been reading his theory for years - and hasn't strayed me wrong yet. Best to invest your money into solid companies with good dividends and low debt...or better yet - gold.

baby_BLYTHE's picture

Marc Faber agrees with this 'short term' trade.

He appears to have been proven correct once again

emil's picture

Well MKC your contrarian argument has been borne out by the zerohedge rabble.

I too am long Treasuries and apparently with good reason.



docloxvio's picture

Buying bonds with a negative rate of interest from an entity that is borrowing 43 cents of every dollar it spends and is on the cusp of having it's credit rating downgraded is not just a bad idea, it's insane.

bulldung's picture

I hope Tyler was well compensated for this ad.It reminds me of when I read Liar's Poker and learned that your "friend "/broker would sell you bad investments to get them sold for some other friend. Being an honest naive neophyte to investing then, now I am a suspicious ZH reader who LOLed when I read the title. After reading the post I must assume the writer has a lot of treasuries to unload.Keep buying the ad spots, Tyler needs the money.

Orly's picture

How about he would like a fair and balanced site which welcomes all reasoned views?

Instead of the constant anti-cheerleader doom-and-gloom crowd being satiated on a constant basis, how about he allows someone with a different perspective tell you you might be wrong?  Just because you don't want to hear it?

Get over yourself.

Kayman's picture

With the greatest respect Orly, when you throw a piece of raw meat out, you should expect some tearing of flesh.

Contrary positions ought to be welcome, but there is no substance to the argument. 

The trick to survival in the paper world is understanding "how long can the wizard of credit keep doing his conjuring trick ?"

Will a $10 trillion dollar Fed balance sheet and a $20 trillion dollar (admitted) Federal debt load, create sufficient growth in the economy to carry the cost of the debt (assuming, naturally, that the principal of the debt never gets paid) ?

Politics and Mathematics are going to have a fight to the death; I am betting on the math.

Orly's picture

No offence taken, Kayman.  I understand that the Federal Reserve is a private banking cartel and is but an arm of the Bank of England and the Rothschild bank and Zionism and blah, blah, blah.

My only point was that to suggest that ZeroHedge has some surreptiously "sponsored" article is clearly absurd.  Surely, if it were an ad, they would mention that, don't you think?

Or does Tyler break the common rule: "if you hate something, don't you do it, too"?  Personally, I give them more credit than that.

bulldung's picture

When an author gives their professional affiliation or contact information, it is an ad, free or paid. If the poster cites a professional research article, it is a source or copyright infringement.Opinion as I am not a lawyer, but the source affects the bias of the info.I appreciate the article as we are all guessing deflation or inflation and it helps my confirmational bias struggle. . If I had to manage billions,I might be compelled to have some short term bonds.Sooner or later rates will converge to the norm, so I am in Gross' camp $or short term.