The U.S. Treasury this week announced plans to retire $35 billion in notes, the first time the government has paid down debt since 2007.
It’s a significant milestone for Treasury and $35 billion is a lot of money for mere mortals, but barely a drop in the $16.7 trillion bucket of our nation’s debt.
Among others, Michael Pento, president of Pento Portfolio Strategies, believes the U.S. Treasury market is a massive bubble destined to pop with devastating consequences.
U.S. Treasuries are “the most overpriced, oversupplied and over-owned market in the history of American markets,” says Pento, citing current Treasury yields as 550 basis points below the 40-year average, the massive inflows into bond funds (nearly $120 billion from 2008-2012) and the 140% increase in issuance since the end of 2007.
Unlike most, Pento is willing to put a timeline on when he believes the bond bubble will burst, which is the theme of his not-so subtly titled new book: The Coming Bond Market Collapse.
Sometime
Read More »from The “Most Overpriced, Oversupplied, Over-owned Market in History”