I hope you guys realize that TBT is going up because of hopes of an economic recovery and therefore higher interest rates which are insane at 0%. It has not been rising due to the doomsday hyperflation economic collapse reason otherwise the stock market would not be rising like this. Notice how tbt is highly correlated to the stock market right now.
So, in effect you guys are bullish on the economy if you are long TBT. If you are not bullish on the economy then you are making money for the wrong reason i.e. you are lucky.
I don't care why it goes up, so long as I'm making money doing it. :-)
I'm here because I personally think giving the US gov't money for a 30 yr bond at a 3.81% interest rate is ridiculous and can't quite comprehend why anyone would do so... That said, I'm much lighter here than I was when it was below three percent in late December. I was loading to the gills back then. But all our long term holdings are in bond funds and have been since late last year. The spread will contract in time and I plan on making money on that from both directions (long various kinds of bonds and short the long treasuries. I get paid nicely in the bond funds as I wait and hoping I'm able to catch a run here too. So far the strategy has worked well. If this rally is rolling over (and I think it is) then I'll peel off some of the high yield holdings and buy more shares on the pullback. I'm not presently in TBT because I sold end of day last Friday and wanted this to pull back to 43 again before buying back.
I agree completely. All these doomsayers would be very misguided to be holding this ETF. If interest rates rise because of a complete collapse, these holdings become worthless. After all, you're going to be paid in dollars when you sell...
The only reason to hold TBT is if you believe rates will rise due to capital flowing away from safety into other investments (ie, an improving economy).
<All these doomsayers> You inadvertently hit on why this is the mother of all bubbles. What exactly does doomsday have to do with the US paying a real rate of interest for long term money? Since when is 5.5% is armageddon??? This bubble mentality has creeped into bright people debating on this very board that interest rates will stay preternaturally low forever. Yes 5.5%. I know guys that are paying 22% for 3 year commercial real estate money. Imho, in real time, there is a funding crisis developing right under our noses.
The US economy does not have to improve in order for T-bill rates to climb!
The money can move into all kinds of comodities and asian stocks. Look at IOC for example. It's up 100% this year. They develop NG in PNG and they will sell it to China.
Look up "stagflation" at Wikipedia.
BTW, the US has had exactly 2 years of mild deflation in the 76 years since 1933. 1933 was the year the US went off the __________ standard (fill in the blank) and obtained the ability to create new $$ at will.
It is possible to learn from history, although most people seem to prefer to get their lessons from the scholars at CNBC where the entire length of history is about 4 hours.
You are correct in regards to the stock market correlation at this time. The money is moving out of the treasuries and into the market reflecting well upon the price of TBT, but that is only for the near term. Corporate and municipal bonds will begin to default at a exceedingly high rate over the next couple years. Then you will start seeing the treasuries requiring higher yields as problems continue to worsen. The next few years will be interesting as the consumer continues to disappear and our GDP continues to fall along with our national debt increasing at a gross rate. I think you can refer to it as armagession. I am going to learn my field skills and mandarin so I can communicate with my next employer - The Chinese. In the meantime, I hope to make some decent money in TBT. I have never felt so sure about an investment in my life.