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If one could predict the eventual collapse of

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Gregory_   Tuesday, 01/01/13 04:52:54 PM
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If one could predict the eventual collapse of the bond market, they could position investments well. This seems difficult considering Japan has been playing a similar government bond buying game for multiple decades without collapse.

I heard somewhere (Puplava's radio show?) that 70% of our treasuries are purchased by our government. How would one confirm this?

If the government is buying most of the bonds, this would explain low interest rates.

It seems these are the sources of treasury buying:
-=1.) Our government <-- 70%?
-=2.) Banks (borrow from the Fed and then carry trade off of the treasuries for an easy buck)
-=3.) Foreign entities/governments (slowing down?)
-=4.) Private individuals

I suppose 1 and 2 are the largest source. It seems highly unlikely that 1 will diminish any time soon, and this seems to have carried Japan for multiple decades. Therefore, one could expect low interest rates to continue for multiple decades here. This would mean shorting the bond market is a BAD idea. However, Jim Rogers is doing it as of a couple of weeks ago (listen to latest Puplava interview with him).

#2 will not diminish as long as they can make easy money (as long as they can borrow for less than the treasuries pay).

#3 and #4, I contend, simply do not matter in the face of the immense buying from #1 and #2.

Any thoughts?



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