InvestmentMAGE's Blog : "Kobayashi Maru"

In certain circles, this is a euphemism for a no-win scenario.

The no-win scenario I would like to discuss today is, the bubble in the twenty year treasury notes. At current rates is not much better than placing your money under the mattress. In fact if you factor in inflation and taxes, you are actually losing money, thus a no-win scenario.

Why would anyone choose this no-win scenario?

Fear of Deflation.

However Chairman Bernanke (aka Helicopter Ben1) has exhibited a total aversion to deflation and has all but promised to do everything in his power to prevent it, even at the risk of stimulating inflation.

In the final analysis one can conclude that the long term treasury note bubble will not last.

http://seekingalpha.com/article/112105-t-bills-bubble-bubble-toil-and-trouble

Recommendation:

Long tbt, short tlt

Caveat:

Beware, pundits have been proclaiming the demise of this bubble prematurely for almost a year.

http://www.seabreezepartners.net/newsArticlePrinterFriendly.asp?id=179


1 Helicopter Ben: In 2002 He referred to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation. Bernanke's critics have since referred to him as "Helicopter Ben"