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Tuesday, July 5, 2011

'The Coming Bond Crash: Three Moves for Every Investor'

from resourceinvestor............

"Since last November, the US Federal Reserve has been buying US Treasury bonds at a rate of about $75 billion a month. That's part of Fed Chairman Ben S. Bernanke's "QE2" program, under which the central bank was to buy $600 billion of the government bonds.

But QE2 ended Thursday, meaning the Fed will no longer be a big buyer of Treasury bonds.

So starting Friday, the US Treasury needs to sell twice as many Treasury bonds to end investors as it had been.

But the problem is, who's going to buy them?

Not China, which is diversifying its trillions in assets to get as far away from the US dollar as fast as it can.

Not Japan, which is trying to rebound from its March 11 earthquake, tsunami and nuclear disaster – and is focusing all its spending on reconstruction.

And – as we've seen – neither is the Bernanke-led Fed.

I'm telling you right now: We are headed for an epic bond market crash. If you don't know about it, or don't care, you could get clobbered"...............READ MORE

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