Martin Hennecke, a frequent guest on CNBC, is recommending that investors who have fled to cash and government bonds need to rethink that strategy.  He sees inflation on the horizon and warns that western sovereign bonds will suffer as a result and sitting on cash will be throwing money away. 
The crux of his thesis [...]

Ten-year treasuries are yielding about 3.15% now, that is a significant increase from a yield of just over 2% in December. I for one, thought that Treasuries were in a bubble at 2% (See my post, “Treasurys are in a bubble” from December 08). The thing is I also thought the economy was so weak and the Fed so manipulative that the bubble would get even worse. Bad call. Of course, that didn’t happen.

Jim Grant is definitely not in the deflation camp. He believes a robust policy response and enormous expansion in the Fed balance sheet is storing up monster inflationary forces which could take holding a recovery. As a result, he is quite bearish on treasury bonds. He also says “the dollar is not the [...]

This contribution comes from Marc Chandler of Brown Brothers Harriman, one of my favourite currency strategists. His latest missive highlights the huge amount of debt being issued by sovereigns. It is not just the United States.:
Much of the supply angst on Wall Street appears aimed at the US Treasury, which due to the [...]

It is almost like they are trying to manipulate the market prices on a day to day basis.
At best the total $300 billion is probably less than 1/5th of total treasury issuance (not counting TARP, etc, for fiscal 2010).
By the way, I calculated that Treasury interest cost has decreased and is running around $250 Billion, [...]

Quantitative easing is now the main policy course for the U.S. Federal Reserve. The U.S. Federal reserve is buying $300 billion in long-term U.S. government debt in order to keep interest rates low. As a result, the rally I in Treasuries that I have long anticipated is upon us – it is the most powerful rally I have ever witnessed.

As Marc Faber has said, “don’t underestimate the power of printing money.”

The U.S. dollar is getting hammered today. It is now trading near 1.34 to the euro, 1.42 to Sterling, 96 to the Yen and 1.14 to the Swiss franc. These are huge hockey stick style moves. from 1.30 to the euro, 1.39 to the pound, 98 to the yen and 1.18 to the Swiss franc just this morning. The dollar is getting killed here.

Marshall Auerback here.

Here is my take on Chinese Premier Wen’s recent statements. At the end of the day, too many people seem to be working on an old gold standard type of model in the sense that there are implied limits in terms of what the US can do as an issuer of a fiat currency. I have always seen this as relevant only to the extent that China insists on being paid back in another currency other than dollars. The irony is too wonderful here, for what China has become expert at is manipulating the Obama administration. Think from the Chinese perspective about the wonders of getting Secetary Clinton to grovel and thank them for buying our paper.

Relying on the kindness of strangers is not a very good way to ensure one’s fate. However, this is certainly what the United States has been doing in running about a mountainous current account deficit. America’s largest creditor is now worried that the U.S. is not a good risk and has said so in public for what I believe is the first time. Given the mounting U.S. government deficit, this cannot be good for the U.S. Treasury market.

I was just re-reading my November post on quantitative easing when I got an alert about Pimco’s inflation call.  While I still see downside risk for the economy, and, consequently, deflation, I have grown more worried about inflation — one reason for re-reading the post.  Pimco is not the only one here, Warren Buffett and [...]