Spock

Thomas, on 14 September 2011 - 09:55 AM, said:

Thanks, Thomas. I understood what you meant in the first iteration.

But it's your third point that struck a chord in my little pea-brain.

If I were to pile into Uncle Thug's 30-year IOU, then interest rates DID actually sky, not only trapping me forever in my investment--unless I wanted to sell at a capital loss, of course--but also paying me a paltry return while the rest of thw world was extracting double-digit "pounds of flesh" from Uncle for lending him money, then I would indeed be up on that ledge...and not metaphorically.

So, once again, thanks to all for talking some sense into me.


Now, watch 30-year rates collapse to two-percent...LOL!!!

Heh the "Bond Vigilantes" of days long-past have been replaced by the "new gunslingers": the CDS gamblers.


These guys are the present posse, who punish any country that runs up too much debt--even as the central banks keep interest rates at artificially-low levels.

Well, it's about time somebody stepped in and did the job of the former "Bond Vigilantes". Because Lord knows that the old guard have all be converted to central bank front-running Pigmen.

LimeJuice2, on 12 September 2011 - 06:38 PM, said:

Ya know, Lime, that is a tempting strategy. Really, I hadn't thought about making a couple grand a DAY from just being lucky enough to time the wildly-gyrating stock markets just once.

Then, I could quit for an entire year and have NOT ONLY the same amount of money I would have gotten from Uncle Thug in an ENTIRE YEAR, but my principal wouldn't be tied up for more than a day--as opposed to a decade.

However, James Grant's words--spoken decades ago-still echo in my ears. The erudite Mr. Grant having stated that playing the stock markets is like having a pet tiger. Sure, it's pretty and even cuddly, then one day it bites off your arm!!!

LOL.

Thanks again to all for the advice, and at this point I am leaning far more toward doing NOTHING (which has been the bulk of my investing strategy over the previous ten years anyway), and doing a little more waiting.

unregistered*, on 12 September 2011 - 04:06 PM, said:

(Spock) And as I look at that continued, twenty-year (and continuing through the last five years) collapse of JGB interest rates--despite the fact that Japan is now well north of 200 debt-to-GDP, I keep asking myself why I wait to pile into Uncle' Treasuries.

Now, here's a REAL shocker for ya: would you believe that ten years ago, I WAS piled into Uncle's IOUs in a 401(K)? Well, it's true. the yield at that time was about eight friggin' percent, but stupid Spockputin cashed it out because I was SURE that Uncle's interest rates would rise, since he was issuing so much debt.

Well, fast-forward to today and Uncle has stacked on an ADDITIONAL ten trillion dollars of debt, but yields have utterly COLLAPSED to today's sub-two percent. Yet every fiber of my being is screaming "This can't go on!!!".

So, I probably WON'T buy a 10-year treasury tomorrow, then the Fed WILL announce "QuantSleaze to da mooon!!!" at their next FOMC meeting, and the rate on Uncle's IOUs will fall to one-percent, leaving me again out in the cold.

Such is the life of "he who hesitates"...LOL.

Thank you all for your input. I will continue to think over piling into Uncle Thug's debt, but perhaps consider piling less money into it.

Spock