Jim Rogers Sounds Alarm On US Treasuries
Jim Rogers Sounds Alarm On US Treasuries
In this interview with Capitol Account, Jim Rogers sounds the alarm on US Treasuries. Jim rogers points out that the US is the biggest debtor nation in the history of the world. Jim Rogers has been a very successful investor by spotting market trends. He has recommended purchasing hard assets and particularly farmland and timberland for the past several months.
At Prepper Recon, we agree with Jim Rogers and also believe that US Treasuries are in a bubble due to their real negative yield. The nominal yield on 30 year Treasuries are around 3% at the time of writing and the interest rate is closer to 6% after we strip away all of the government manipulation and stimulus money according to Shadowstats.com. That leaves the real yield of a 30 year Treasury at -2.5%. The bond market will not put up with this for long. They have been willing to accept the negative real yield because the dollar has had such an outstanding reputation of being a safe haven asset, but those days are drawing to a close. Once the confidence in the dollar cracks, the bond bubble will deflate rapidly. Those who are positioned to take advantage of this event will profit greatly. There are several inverse Treasury ETFs that can allow an investor to take advantage of the popping of the treasury bubble. Before deciding to use any investment vehicles, I recommend reading up on how they work as it is beyond the scope of this article. TYNS is a non-leveraged inverse or short ETF of 7 to 10 yr US Treasuries. TYBS is a non-leveraged inverse or short ETF of 20- 30 yr Treasuries. They are designed to gain value at the same rate Treasuries of the same maturity lose value. 3x leveraged short ETFs include TYO for 7 to 10 yr and TMV for 20 to 30 yr Treasuries. They are designed to gain value at 3 times the rate Treasuries of the same maturity lose value. Of course the opposite is also true. They can also lose value at 3 times the rate that Treasuries gain value. Investing is inherently risky by nature. Leveraged funds are even more risky. Be sure you understand them before investing.
As a disclaimer, I am not a financial adviser although I do hold a degree in Accounting and am currently studying for a degree in Finance. We do not hold any of the ETFs mentioned but do plan to purchase them once we see the bond market begin to show signs of popping. That could be next week, next year or ten years from now. I have been amazed at the willingness of the bond market to continue to accept negative yields from a borrower like the US who could never possibly repay all of her debt. While I do not recommend investment vehicles because every investor’s circumstance is different, I will let you know when we begin to step into the short Treasury funds that I mentioned.
Happy Prepping!
