CHINA FEARS EVENTUAL US INFLATION
China buys short term treasuries, sells long; according to a Bloomberg article published Sunday night. Bloomberg article. "China bought $5.6 billion in bills and sold $964 million in U.S. notes and bonds in February, according to Treasury data released April 15. It was first time since November that China purchased more bills than longer-maturity debt." the article said.
China has publicly spoken out about the US's deficit spending and the potential devaluation of the dollar. I agree that we are headed for high rates of inflation in the future and have been advocating owning hard commodities including oil, gold and even selected REITs. (I recently purchased some Boston Properties BXP). The Federal Reserve says that they can avoid future inflation by removing the stimulus money from the system. To do this successfully, timing is criticial. Can they do it?
Remember, it was only a couple of months ago that they realized that we have already been in a recession for a year! Don't count on the Fed to do anything right. Ever! Maintain a short position in long end treasuries.