Even though the Fed continues to rig and manipulate the US Bond market, artificially distorting long term interest rates in the name of “saving the economy” ( who will save us from the Fed?), the fact is that the US long bond has been a gigantic DAWG when it comes to the smart place to put one’s wealth to preserve its value.
Watching the day to day gyrations in the US bond market and the mockery that the Fed has turned it into, I sometimes wonder who in their right mind would even consider putting their wealth into these worthless scraps of paper IOU’s or regard them as a safe haven. AS a matter of fact, I cannot bring my mouth to utter the two things together in one single breath – “US Treasury” – “Safe Haven” – without a feeling of total revulsion coming across me.
While the Fed may have hoodwinked some investors into believing that they have placed their money into a safe haven where they may find a store of value, gold is not buying into that claptrap for one single moment.
Just look at the ratio comparing the two and note how gold has left the US long bond in the dust. Now, looking over this chart, which one do you think a wise investor should choose? Or perhaps a less charitable way of saying it: “Who is stupid enough to buy pieces of confetti paper promises to pay when the Federal government is spitting them up like hairballs from a long-haired Persian cat?” The more I think about this, the more I am convinced that the hairballs have more appeal – at least they are healthy for the cat to get rid of out of its system. What can be said about US debt obligations???
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