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Six Reasons To Buy US Treasuries (In 1 Chart)

Tyler Durden's picture




 

Ten-year bond yields in six euro-area nations ended at a record low on Friday as geopolitical tensions fueled demand for the safest fixed-income securities (before everything was ruled 'fixed' later in the US day). As the world's central banks policies begin to diverge, it appears US Treasuries are increasingly attractive on a relative basis for the 'reach for yield' herd (especially as high-yield technicals dominate) in this new normal world (even on an FX-risk-adjusted basis).

 

 

Chart: Bloomberg

 

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Mon, 08/11/2014 - 14:42 | 5077665 SWCroaker
SWCroaker's picture

Um, reach for *what* yield?  My niece pays me more on her allowance advance.  UST yield is 2/3rd larger than rest of pitiful, but when you get near zero, 2/3rds larger than zero is still....

Mon, 08/11/2014 - 14:52 | 5077791 TeethVillage88s
TeethVillage88s's picture

They are all so Broken, no one can fix them.

You can't fix stupid.

Mon, 08/11/2014 - 15:09 | 5077937 max2205
max2205's picture

Broken. Broken, you don't know broken....France 10 year is lower than the US?

Bee R O KAN

Mon, 08/11/2014 - 16:20 | 5078432 Cognitive Dissonance
Cognitive Dissonance's picture

Bee R O KAN. Too funny.

So are those Italian yields. All fixed in Italy folks, first time since the end of WW2. Step right up and buy buy buy bye bye bye!

Mon, 08/11/2014 - 14:42 | 5077691 LawsofPhysics
LawsofPhysics's picture

Counterparty risk?  In many ways, the U.S. government bonds are backed by the average citizen.  Remind me, how has the average U.S. citizen been acting lately?  There's your counterparty risk bitchez...

Mon, 08/11/2014 - 14:50 | 5077755 FieldingMellish
FieldingMellish's picture

Bonds are backed by the future productivity of future citizens. Party today, for tomorrow is a long way away.

Mon, 08/11/2014 - 14:51 | 5077771 LawsofPhysics
LawsofPhysics's picture

Again, take a look at the average young person in the states, across all demographics.  There's your future "productivity".

Mon, 08/11/2014 - 15:17 | 5077990 QQQBall
QQQBall's picture

Still better than Spain and Grease

Mon, 08/11/2014 - 16:49 | 5078594 BrosephStiglitz
BrosephStiglitz's picture

Possibly, but only because of the combination of high taxes, peak bureaucracy and lack of energy reserves has murdered productivity.

I suspect if you gave the people a credible plan for the future (and hope) they would work their asses off.  Those countries are at peak despair right now.

Mon, 08/11/2014 - 15:05 | 5077910 lasvegaspersona
lasvegaspersona's picture

Actually bonds are backed by the ability of the government to convince the Fed to print more currency when the bonds mature. Since that part is easy everyone knows that they will, without question, get paid.

The question is whether the dollars being paid out then will be worth as much.

For those who just need a promise and nominal performance the US treasury can't be beat.

Those small people who are trying to preserve wealth however should probably consider other options. If a bank buys bad bonds the bank will get support. If I buy bad bonds I'll be on y own holding worthless paper. This is why I prefer gold. Banks can't do this but we can. Don't try to be a bank (or a pension plan). Individuals need to recognize that the motivation is very different for a  government supported entity like a bank, a city or a pension plan than it is for a person of modest means.

Mon, 08/11/2014 - 15:15 | 5077979 LawsofPhysics
LawsofPhysics's picture

^^^this.  Unless of course you are buying billions, and even then I suggest taking delivery of the physical bond paper just in case.

Mon, 08/11/2014 - 14:43 | 5077701 Jack Sheet
Jack Sheet's picture

"reach around" for yield
looks like Murkle's spread is widening

Mon, 08/11/2014 - 15:02 | 5077891 TeethVillage88s
TeethVillage88s's picture

Here is one Reason not to Buy US Treasuries:

'The border fence is a joke': Filmmaker crosses from US to Mexico dressed as Osama bin Laden as Border Patrol says 'we can't be everywhere at once'

James O'Keefe, known for guerrilla documentaries targeting liberals, says US Border Patrol was nowhere to be seen when he crossed border twice
The conservative firebrand wore a bin Laden mask to show the national security implications of unmonitored borders
A Border Patrol official said agents who ought to be on the 'front lines aren't even on the front lines anymore'
Texas sheriff showed how a section of border fencing ends abruptly, providing easy access for immigrants to sneak in from Mexico

Mon, 08/11/2014 - 15:32 | 5078125 Jack Sheet
Jack Sheet's picture

not so sure, aren't the uncontrolled influx all potential future boots on the ground for military backing of the USD?

Mon, 08/11/2014 - 23:25 | 5080448 TeethVillage88s
TeethVillage88s's picture

All immigrants are potential Army Enlisted. Sure.

They are potential DHS, TSA, State Reps, House Representatives, Senate, and US President.

What you don't want US Reset to happen?

Mon, 08/11/2014 - 18:18 | 5079005 Babaloo
Babaloo's picture

Tell me your post is a joke.

Mon, 08/11/2014 - 23:21 | 5080441 TeethVillage88s
TeethVillage88s's picture

Tell me ur Post ID is a Joke.

Babaloo! Babaloo! Hey here is a clue, no one in ZH is posting jokes about the border, immigration, disease, rape, murder, refugees, war, or Financial Crime.

So maybe you are in the wrong place.

Mon, 08/11/2014 - 14:51 | 5077768 Zirpedge
Zirpedge's picture

150 basis points is better than a loss anyday. Actually, I like the way those "average US citizen" folks are being handled by their owners. US Treasuries are a sure thing, been stackin my MyRA since the beginning.

Mon, 08/11/2014 - 18:22 | 5079016 trebuchet
trebuchet's picture

I'm with you on that one, it smells like capital preservation time. 

Buying Russian paper using chinese fiat is the new carry trade/diversification strategy... when is the ETF out?

 

 

Mon, 08/11/2014 - 14:52 | 5077784 Thomas Aquinas
Thomas Aquinas's picture

The "Money Power" must have a great laugh at all these "investment recommendations".

They are just maxing personal/state/government/world debt and then will pull the plug, destroy savings/investments with hyperinflation and then even steal your bank deposits LEGALLY to keep their banks alive.

Buy gold and silver and stock up on necessities. 2015 is the major year.

 

It is too late to prevent this:

http://www.fatima.org/thirdsecret/fulda.asp

 

 

 

 

Mon, 08/11/2014 - 14:53 | 5077786 4 wheel drift
4 wheel drift's picture

unless, and until there is a comparable currency/alternative to the us dollar as a VIABLE reserve currency.....

long term (near) zero interest rates for US.

 

unless of course, the CROOKS (aka politicians) decide to exempt themselves from paying interest on the debt...   of course if so...   revolution may be in the air....

 

as for gold and PM....      markets are manipulated for such...   that makes it non viable as a reserve...

Mon, 08/11/2014 - 14:57 | 5077836 TeethVillage88s
TeethVillage88s's picture

Crooks acting in Concert.

Today in a Bold Move the World Central bankers all lowered Interest Rates to NIRP. Savers and Bank Account Holders will now have to pay .5% on all dollars held and give blow jobs to one of the bank officers. /s

Mon, 08/11/2014 - 16:50 | 5078606 lasvegaspersona
lasvegaspersona's picture

The gold derivative market is fairly new and was developed to make gold 'go farther'. The dollar collapse will also be a paper gold collapse. When gold becomes a physical only market we will see a higher price and we will also see it perform very well as a reserve.

You are correct for now however. At 1300 U$D per ounce gold cannot work.

Tue, 08/12/2014 - 00:30 | 5080588 shitco.in
shitco.in's picture

It's called Bitcoin, and it's on sale today. 

Mon, 08/11/2014 - 14:59 | 5077835 JaKst3r
JaKst3r's picture

"What the fuck, we flooded the world with free money and production has decreased?!!" lolz
Just watching the UK/US debt clocks gives me a semi
Systemic failure.. financial system is built with exponential debt to cover interest.. not pretty, we are in a fun exponential phase. shorts covered by QE
Guaranteed ECB will start QE as fed stops.. kicking the can with a broken leg
tbh, london is soaking it up right now.. at the expense of everyone who actually lives in the uk...

Its ok.. we have some moar WAR to soak this bloodriddled shit up...

New school same as the old school, but thinking they are so much cooler!

Mon, 08/11/2014 - 15:03 | 5077895 himaroid
himaroid's picture

At least six more reasons are the articles on this page.

Mon, 08/11/2014 - 15:02 | 5077897 Thomas Aquinas
Thomas Aquinas's picture

It is true that gold and silver are manipulated, but take a look at this performance ve the DJI:

 

http://www.munknee.com/how-gold-has-performed-vs-the-dow-in-the-past-dec...

Mon, 08/11/2014 - 15:53 | 5078159 CHX
CHX's picture

Thank you, but I won't help finance the 17+ T official debt ponzi for a measly 2.5% and negative real ineterst rates. USD and all fiat world wide are dying and on live support. This system won't last another 5 years (5 months, maybe?), so I will happily leave that to someone else and watch the shyte show in the mean time, hopefully in peace and quiet. They've kicked - and still are kicking - the can down the road. Some day we will wake up and find a new can, a heavy 180 kT gold can that will sit right in the middle of the road and will not budge. 

Mon, 08/11/2014 - 16:29 | 5078486 q99x2
q99x2's picture

BTFD until the nukes go off.

Mon, 08/11/2014 - 23:33 | 5080470 TeethVillage88s
TeethVillage88s's picture

U don't think stocks collapse ...after Global Thermonuclear war? Well if computer backups are accepted ...as Dominion over Blue Collar workers, Farmers, Truckers, Mechanics, Oil and Gas workers, Coal producers, Energy Producers, Importers... Well will U have pussy or only dick at that point???

Wed, 08/13/2014 - 02:44 | 5086005 onmail
onmail's picture

This is nothing.

In countries like India Govt. banks are giving 9% (yes Nine percent) on Fixed Deposits which can also be encashed anytime.

Why not take your $ there and make a big big time?

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