Treasury Bonds--the next bubble?

I'm short longer-maturity T-Bonds. It's the last bubble, and bond holders are going to get crushed. I don't know if it's tomorrow, next month, or next year, but tying up your money for 30 years, and getting 2.6% for the privilege is going to prove problematic. It pisses me off that the Fed and Treasury can act unconstitutionally with no oversight, saddling us taxpayers with trillions of toxic debt. WTF? Having said that, I gotta do what I gotta do to protect myself.

Keynes is dead: the Fed thinks they can control the economy. All they've done is create one bubble after another--all unintended. Monetary easing created a tech bubble, at which point, Greenspan declared irrational exuberance and popped the bubble. He then did an emergency reflating to avoid a deep recession, and thus created a real estate bubble. Then he raised interest rates 17 times, popping that bubble. And now they are reflating like there is no tomorrow, deploying quantitative easing to try to save the world economy (bailing out broken industries), but in the process, creating a Treasury note bubble. The Treasury is printing so many dollars they are outsourcing to the Swiss the printing process--they've run out of domestic capacity! This will be the last time helicopter Ben and machine gun Hank will be able to hoodwink foreign investors. When investors flee in droves away from what they thought was safety (US government IOU's), they will flock to other vehicles, whether it's high-grade equities or the currencies of last resort: gold, silver, and the yen. Or their mattress, which will prove problematic when deflation turns into hyperinflation. Interest rates will soar, as investors (many of them foreign sovereign funds) will demand higher rates of return. Think 1970's...

Investors will continue to lose fortunes watching CNBC and Fox News. They report facts ex post facto. Debating whether GM should be bailed out or not is banal. The money has already been made or lost a year ago, before the 90% plunge in GM's share price. That's why buy and hold doesn't work. Our central banks are manipulating the markets with each intervention. It'll only drag out the inevitable recession. Japan did the same thing. Their Nikkei stock index in 1990 was 39,000. Today, in 2008, it stands at 9,000. And our credit default swap problems are orders of magnitude bigger and worse. Stop the bail outs. Let 'em fail. Quit trying to give good money from competent people (taxpayers) to incompetent people (GM and the UAW). The incompetents will just piss it all away again.

And with the public focused on equities, they will always lose. Hint: they should be following indicators from two much bigger markets--fixed-income and forex, watching their capital flows. Central bank interference is causing different asset classes to move parabolically up and down. They're debasing the US Dollar in the process, and sending most of us to the poorhouse.

The latest outsourcing business to hit the US...

The US Treasury is busy printing so many US Dollars that they have outsourced it to printers in Switzerland. That's right--our government is so intent on printing trillions of dollars that they are wearing out their printing presses, and have had to resort to offshoring the printing process. Hence, the ultimate conundrum: "Helicopter" Bern Bernanke and fellow cohort Hank "Machine Gun" Paulson have repeatedly preached about a strong US Dollar. Yet, their actions for months have been completely undermining the strength of our currency.

This indiscriminate and unconscionable monetary easing dwarfs any on record--it is essentially criminal.

Meanwhile, my long gold and long yen positions are playing out as predicted, so my portfolio is profiting handsomely. But it is bittersweet, as we will experience the second act of post-1990 Japan. Japan's Nikkei stock market index stood at 39,000 in 1990. In 2008, it stands at 9,000.

The next bubble to burst are Treasury Bonds. The 30-year maturities are yielding 2.6%. Investors by the droves are basically saying, "Mr. U.S. Government, I know your currency is tanking by the day, I know you are printing dollars like there is no tomorrow, I know your solvency is at risk, I know your balance sheet is deteriorating with trillions of debt, and I know you have to chase good money after bad money (the bailout mantra), and yeah, I know you've been beaten down. But can you please hold on to my money for 30 years, and pay me 2.6%, for the privilege?"

Once investors wake up to the reality that their allegedly "safe" investments aren't so credit-worthy anymore, they will demand higher rates of return in exchange for taking on the additional risk. And when that happens, the Treasury Bond bubble will burst, just like the residential sub-prime mortgage bubble burst. The Fed eased too much, creating a real estate bubble after the tech bubble burst. They then raised rates 17 times, bursting the real estate market. Now they are easing rates to 0%, creating another bubble--this time US Treasuries.

Is anybody seeing a pattern here?