Inflation

Short-Term TIPS Market Oversupply Could Lead to Stronger Long-Term Demand

08/06/2009 by Research Reloaded

The US is increasing its sales of treasury inflation protected securities (TIPS) in response to Chinese interest. While TIPS will remain a tiny market on comparison to the $6.66bn US government bond market, it looks like we could have $10bn in new supply flowing into a market which issued just $44bn in the nine months to June 2009. That's a lot of new supply in relative terms. The TIPS market fell on the news, no doubt due to fears of this potential oversupply, but might there be a positive angle to this development?

Skewed Risk/Reward in US Treasuries - Continuing Opportunity

05/14/2009 by Research Reloaded

Below is a chart of US 10-year treasury yields going back to 1962. Question. Does something look wrong with this chart? Excluding recent months, Treasury yields are lower than they have ever been back to 1962, while in direct opposition to this we have a US government who loves to spend money and rack up debt, plus who historically has an affinity for moderate inflation and not so moderate dollar devaluation. 

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