I read a blurb recently that said bond traders disagree with Bill Gross's (manages the largest bond fund in the world) opinion (he's selling) of treasuries... They contend that there's still value - that record low interest rates will remain as far as the eye can see...
Gross has apparently sold all his fund's treasury holdings and moved substantially to cash... You'd think that yields would've spiked on the news that the Warren Buffet of bonds has left the building... But no, somebody out there, other than the Fed even, is still willing to buy... Guess who -- China...
According to Forbes.com's March 10th Streettalk column China Buys PIMCO's Treasuries and a Great Deal More, our trading partner just added $262 billion worth to its portfolio... China's traders did this incognito, having a UK bank do their bidding...
As I keep preaching, the day the Chinese dump the dollar, and royally screw themselves by the way, is not in the offing...
So is there or isn't there a bond market bubble? Oh yes indeed there is... But as we've learned (you and me that is, right?), bubbles can bubble for a long time before bursting - think tech stocks and real estate...
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