Thursday, December 29, 2005

The news that is too Big for a Forbes reporter to grasp

The Japanese equivalence of our ten year notes are trading at 1.5%
Checkout the chart to see how our dollar is gaining strength on the Yen.

Put the two together. A Jap has two choices 1) by his notes and get a 1.5% rate of return, or 2) buy our notes and get a 13% rate of return after combining dollar momentum with our notes rate of return.

Will he buy our or his, hmmm....

If he buys so many of our notes that the Ten year treasuries drop to 2%. Will he still buy more?

The interest rate on a ten year note will fall, not rise

Mortgage rates will fall, not rise.

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