The real reason treasuries are falling

Discussion in 'Economics' started by RiceRocket, May 1, 2009.

  1. The massive selloff in the long end treasuries is not due to the change in failure to deliver rules, or the massive amount to be financed in the coming months. Think about the date. We are 15 days out from last year's tax filing deadline. This is about how long the treasury needed to calculate the income from this year's tax receipts. Those calculations have surely been leaked to the major dealers that trade treasuries. The number must be horrific.

    Treasuries are in a serious bear market now, and are going to have a tough time until the economy shows signs of any "real growth", non-inflationary growth. Tax revenues have basically disappeared. The only way the government will be able to finance this massive, monstrous new interventionist policy without crashing the dollar is to print, print, print, and print more and raise the interest rate that's paid on those printed dollars.

    So, that massive short squeeze/quantitative easing rally that happened last fall is now done. We are now in a new reality for US government debt.
  2. April 15 is the tax filing deadline. You can get extensions for a long time out, but if you have not paid your tax bill by April 15, they will add rediculous penalties and interest.
  3. Wish mine had.

    not too many years ago I made less than half of what my tax liability is now...

    I don't see it getting any better for suckers like me who have to pay taxes...
  4. Expatriate ?
  5. noun or verb?

    noun: I am not an expatriate. just been fortunate and things are starting to go my way

    verb: It might be a good idea, but I'm not sure where to... plus the US insists on taxing global income, so I'm not sure how much that's help, unless the company sending me oversees agrees to pay my taxes for me...
  6. Verb :)

    Of course not an option for everyone.
    As about where: I'd not go with one of the "evil" offshore tax havens (0-<10% rate). With the political environment, these probably all will run into difficulties.

    I'd better choose an "official" low tax country, like HK, some EU-member countries (Bulgaria, Poland).
  7. Tax Free Yachting In Croatia


    way cheaper renting yacht there. cost me equivalent 1 year marina fee to hire new yacht for 1 month in high season. now deals seem to get even better.

    :D :D :D
  8. lrm21


    Thanks for the analysis RR as usual you provide meaningful input.

    The crash in bonds is happening as was expected.

    the next dominoes are the dollar and as an effect skyrocketing prices of dollar based foreign goods

    the current government policies are the lighter fluid to the inferno of dollar deval.

    Something i once thought to be the effect of misguided policies i know believe it the primary intent of the current powers to collapse the currency
  9. I find this thread and the post below to be very relevant and timely, and begs an intense issue that has many scratching their heads.

    RR, I think you're on to something; I think tax revenues will be reported to have absolutely cratered, and at a time when government spending as a % of GDP is trending towards WWII levels.

    This is one reason I frown upon Obama's continuation of Bush's economic policies, let alone amplifying them.

    #10     May 2, 2009