Sunday, March 28, 2010

Jim Rogers: "The U.S. Government long bond is a bubble."

Jim Rogers, as far as I can tell, is the smartest man in the world.  It's in the way he speaks.

Rogers says Treasury bonds are a bubble.
If he's right, Treasury bond prices will drop.
If prices drop, rates will go up.
If rates go up, interest payments on the national debt go up.
If payments go up, the rate of new borrowing goes up--unless and until spending is cut or taxes are raised.

For you, this may mean higher taxes, fewer government services, greater national debt, and bad performance from your retirement savings.



Opt Out of:  Borrow-and-spend politics; personal exposure to US bonds.

1 comment:

Luigi said...

Get into floating rate securities and keep your duration as short as possible. No need to play on anything on the long end of the curve...unless you're short.