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Discussion Starter · #1 ·
Many people seem certain that inflation will rise, causing treasury bond yields to rise. If it's so certain, wouldn't it be a no-brainer to buy an inverse treasury fund such as TBT? This tracks the yield of the long treasury bond (the long end of the curve).

If inflation fears keep causing the long treasury bond's yield up, then TBT will rise as well. Here is how TBT responded in the last six months, mirroring the rising inflation expectation & rising treasury yields. It's up 25%.

I wouldn't do this myself, because I think inflation could go either way. I also think the central banks can intervene and manipulate this rate so this kind of trade is likely a bad idea.

But many people seem to be quite certain about which way inflation and interest rates are going, which is why I'm posting this. People often say that it's obvious that bond yields "have no where to go but up". So if someone has already figured this out and believes it must happen, why not profit from it?

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Discussion Starter · #2 ·
Nobody interested in this trade? I think @Jimmy and anyone else who has knowledge of the future would be very interested.

I wouldn't trade this personally, but that's because I don't think interest rates or the yield curve can be predicted.
 

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I should look into this, I seriously believe there will be massive inflation pressure.

The question is where will it show up.
 

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Discussion Starter · #4 ·
I should look into this, I seriously believe there will be massive inflation pressure.

The question is where will it show up.
Inflation in Canada or US? So far, CAD is rising strongly against the USD.

Possible trades are inverse bonds, or perhaps long commodities.

How accurately do you think you can forecast inflation? Economists are very bad at predicting inflation and interest rates. Hopefully you can do better than them.
 

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Inflation in Canada or US? So far, CAD is rising strongly against the USD.

Possible trades are inverse bonds, or perhaps long commodities.

How accurately do you think you can forecast inflation? Economists are very bad at predicting inflation and interest rates. Hopefully you can do better than them.
(Money Supply)/Inflation =Real Productivity
 

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Nobody interested in this trade? I think @Jimmy and anyone else who has knowledge of the future would be very interested.

I wouldn't trade this personally, but that's because I don't think interest rates or the yield curve can be predicted.
I didn't forecast anything . I just want to educate you on what every investment analyst out there is telling people for your benefit.

Don't get upset every investment analyst out there is telling people to dump lousy bonds. Maybe you should just heed the advice of Warren Buffet, Gordon Pape, the BoA etc etc and look at the rising yield curves vs being so closed minded and assuming you know more lol.
 

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Discussion Starter · #8 ·
I just want to educate you on what every investment analyst out there is telling people for your benefit.
You're not educating anybody; you are applying a very flawed approach to investing, where you listen to what media headlines say and take it too seriously. There are a million analysts out there with a million opinions. You're also misrepresenting what Buffett said.
 

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You're not educating anybody; you are applying a very flawed approach to investing, where you listen to what media headlines say and take it too seriously. There are a million analysts out there with a million opinions. You're also misrepresenting what Buffett said.
They aren't media headlines. They are investment articles in the Globe's investor section or letters to shareholders. You know that is exactly the gist of what Buffet said. The analysts are trying to help you. You should accept their advice more gracefully.
 

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Market derived inflation expectations peaked, at least for the moment. Link below shows spread between the 10y US inflation adjusted bond (TIP) and normal bond. Since these are market derived prices for traded bonds the difference is the bond buyers market derived expectation for inflation in 10 years.

 
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