U.S. Treasuries had their best half- year since 2002 on hope Fed will cut rates in early 2007 but technical charts say the long term rates may be heading 9%
Sonja Anderson
Dec. 31, 2006

The yields on long bonds have come down from 12% in 1985 to 4.5% in 2006. For a short period of time it did touch 3% or so. The steady drop in rates has occurred over the last twenty years. The dollar has also dropped with it. In late part of 2006 U.S. Treasuries had their best half- year since 2002 on hope Fed will cut rates in early 2007. But something terrible is happening behind the scene. The technical charts and Elliot wave counts point to a long-term bear market in bonds that can last more than twenty years.

The triangle shape at the end of a major bull market in bonds over the last twenty years point to a reversal. Analytics point out that inflation and conscious trading attitude in America may be the root cause of future bond market rate adjustments. It is possible as it may seem impossible now, ten year note yield will reach 9% in the next one or two years. One best indicator for long-term yield is gold. Gold market predicts the rates well in advance – sometime eighteen to twenty four months in advance. Higher the gold price, higher is the long-term rates in the future. The commodities and gold are telling the real story of inflation and the long terms rates are now heading for serious jump.

U.S. Treasuries had their best half- year since 2002 on hope Fed will cut rates in early 2007 but technical charts say the long term rates may be heading 9%
Sonja Anderson
The commodities and gold are telling the real story of inflation and the long terms rates are now heading for serious jump.
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