Thoughts on Treasury Yields and What They Portend

On Friday I wrote:

It is certainly possible that global flight to safety will counterbalance an institutional selloff in Treasurys. However, it is also possible that this recent move will mark an end to the 30 year long bullish trend. Just intuitively, I see a 60/40 likelihood for both scenarios, respectively.

So far my intuition has proven correct. What does the stubborn reaction in Treasurys, coupled with soaring gold tell us? It is, in my opinion, crystal clear: That the global economy is in deep deep deep shit, that cash is king, that flight to safety is the mantra of the hour, and that the deflation trade is once again alive and well.

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