Treasury Yield Curve Steepest Since at Least 1980 After Auction....

Treasury Yield Curve Steepest Since at Least 1980 After Auction.

if you read the article you will see that the spread between the 2 year and 30 year has almost doubled within one year. i mean who acknowledges these things. you don't read things like that in the newspaper.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aavXZXqGQ4pQ&pos=2

when discussing rates the following points are valid...

1. the Fed determines the short term rates, not the market.
2. the market determines the long term rates, not the Fed.

for a little while, the Fed, through its quantitative easing, did affect the long rates .. but i think they've shot their bolt.
the Fed said recently that they'll keep the short term rates low, and since they determine these rates, i would believe them.
i think the yield curve will continue to steepen and i do not expect any regression to the mean.

i don't think equities are in a bubble. it has been mainly the big money that has been buying. whereas the average hotcopperite was once perhaps 90% long, i don't think it is now anything like that.

things that may happen in future that will put immense down pressure on the USD ...

1. oil producers will not price oil in USD and will not accept USDs for payment.
2. the USD loses its reserve currency status
3. the YUAN floats.

you mentioned that if interest rates rise, the USD will not go into free fall. if the USD starts falling and gets into a positive feedback loop, the govt will not be able to stop a devaluation. the British learnt this to their cost when they raised rates to try and thwart Soros.