I mentioned earlier today that I am starting to nibble at TBT. Looking at these headlines, I will continue to be very cautious with building my position in this investment.
“This sets the stage for the Federal Reserve to be more formal in its adoption of quantitative easing,” said Vincent Reinhart, the Fed’s director of monetary affairs until last year and now a scholar at the American Enterprise Institute in Washington.
The Bank of Japan is the only major central bank in modern times to rely on quantitative easing -- the strategy of injecting more reserves into the banking system than needed to keep the target interest rate at zero.
Bank of Japan Governor Masaaki Shirakawa said in May that while the strategy “was very effective in stabilizing financial markets,” it had “limited impact” in remedying Japan’s economic stagnation because banks wouldn’t lend and companies wouldn’t borrow.
One option is for the Fed to buy “longer-term Treasury or agency securities on the open market in substantial quantities,” Bernanke said. “This approach might influence the yields on these securities, thus helping to spur aggregate demand.”
Looking at these headlines I am positive that Bernanke will bring 20-30 year bond yields down to 3.00% if not much lower. Hence I will likely add to TBT when it hits $35, $30 and $25. Of course, by the time TBT hits $25 Bernanke will likely be out as Fed Chairman. I mean why the f*ck would Obama keep this idiot around? Bernanke wrote a book about the Great Depression and yet he still couldn't see this sh*t coming even in 2007! Pathetic.
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