Investors Gone Wild!

Have U.S. Treasury debt security investors gone insane? Above, is the current yield curve for Treasure Debt Securities (source: U.S. Treasury Dept.) as of June 13, 2011. I’ve shown the current “official” U.S. Inflation rate (at 2.4%) as per the CPI (Consumer Price Index) from the BLS (U.S. Bureau of Labor Statistics). Bottom line, if you own the 7% T-Note you’re breaking even! We all know that the CPI is grossly understated to keep transfer payments low (Social Security, Medicare, etc.). Then why would supposedly rational investors buy debt securities at B/E? Is it security, patriotism or just insanity? Well, it’s a little of each. The “full faith and credit” of the U.S. Government stands behind U.S. debt securities. Hogwash, the U.S. is already a third world country with 1% of the population owning 24% of the assets. Add in over 40 million people on food stamps, unemployment that won’t go down and housing prices that won’t go up and you’ve got the makings of Great Depression II. The “Great Correction” is, in fact, the “Great Sham and Scam” of the U.S. Government.

And who are the biggest holders of Treasury Debt Securities? No, it’s not China; it’s the U.S. Government with almost 5 Trillion dollars ($5T) followed by, 2 – Mutual Funds $0.8T, 3 – China – $0.8T, 4 – Japan $0.6T and 5 – State and Local Governments – $0.6T. You thought you’re Social Security retirement was chocked full of cash? No, it’s full of paper, i.e., U.S. Treasury Debt Securities of course!
The Master of Disaster

About wfoster2011

Disaster researcher and current financial and economic news and events: Accidents, economics, financial, news, nature, volcanoes, floods, earthquakes, fires; airplane, ship & train wrecks; tornadoes, mine cave-ins, hurricanes, pestilence, blizzards, storms, tzuami's, explosions, pollution, famine; heat & cold waves; nuclear accidents, drought, stampedes and general. Futures trader using high volume and open interest futures markets. Also, a financial, weather and mundane astrologer with over 30 years of experience. Three University degrees from California State University Northridge: BS - Accounting MS - Busines Administration BA - Psychology Served in the U. S. Army as an Armored Platoon Leader in the 5th Battalion, 68th Armored Regiment, 8th Infantry Division (Retired). Have published three books and 36 articles available for sale through my blog: Commodology - Secret of Soyobeans (Financial Astrology) Timing is the Key (Financial Astrology) Scum City, a fiction novel (no longer available, under contract to major publisher) Currently resident of Las Vegas, NV, USA
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2 Responses to Investors Gone Wild!

  1. radiogirl says:

    so what are we to do?

  2. wfoster2011 says:

    Diversive your investment portfolio. Gold; small, medium and large cap stock and bond funds both foreign and domestic. Many large cap U.S. based companies, e.g., Coke have a large overseas exposure. This is good, as the dollar drops, profits from foreign sales will be maginfied. Of course, this works both ways, i.e., if the dollar strengthens, the reverse would be true.
    However, the key is don’t put all your “eggs” in one basket. An old adage, however, a safe investment strategy.
    The Master of Disaster

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