Short Entry Of The Century – All Things American

If you haven’t taken notice recently…..U.S Bonds have tanked over the past few days, with TLT ( the 10 year bond ) falling hard from 119 to 113 in a pinch.

Bonds “price” and bond “rates of payment” are inversely correlated so as bond prices fall… “yields” ( the amount of interest paid out to you as a holder ) increases so…..the lower the price of the bond…the higher the interest the U.S Gov needs to pay out.

The U.S Gov cannot afford to pay out higher interest on these bonds because ( as you remember from the “debt ceiling debacle of days past” ) The U.S is already 100% completely broke.

100% completely and totally broke. Period.

For every single point that bond yields rise,The U.S Gov falls deeper into the abyss – as default looms.

Absolutely nothing has changed since the last “debt ceiling debate” as unemployment continues to plauge any idea of a “real recovery” – but now with stocks near all time highs!

You don’t see a problem with this?

After 5.5 years up, everything that “can be done” HAS been done, and there is no other direction for a responsible trader / investor to do look……………….. other than DOWN.

You are a fool to consider that “this time it will be different”.

Bonds…..the currency and finally stocks.

When she goes……it’s all gonna go.




3 Responses

  1. Michael Penthouse September 19, 2014 / 7:00 am

    Great post as always. I think you are right but timing is still very difficult. Momentum traders could see more headspace for the Dollar.

  2. steve September 20, 2014 / 6:26 am


  3. steve September 20, 2014 / 6:26 am


    Don’t take this comment out of moderation.

    You should clarify for your readers that actual interest paid by the government on all OUTSTANDING debt doesn’t go up when bond prices fall. Even though the yield changes, bond coupon payments stay constant. All newly issued debt however must be issued at the new prevailing rate.

Leave a Reply