Friday, February 15, 2013

Get rid of bonds

Bond prices are on its way down for real this time. The interest rate is too low and it has no way to go but up (bond prices move in opposite direction). In any case, get rid of bonds as the reward/risk is low. 

The government cannot help this time as it is running out of tools to fix these problems. 

When the economy returns, the interest rate has to rise. The reward/risk is not there. 

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