Deleveraging Creates Bubble in Treasury

Wednesday, December 24, 2008 | posted by RedApple
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We all know that Oil has retreated from its summer high of 150usd to 38usd and during the same period 10y note has rallied from 4.27% to 2.08%. The initial deleveraging and the subsequent shutdown of the credit market forces unwinding of risky asset to raise capital. In many countries, the only way raise money is sell hard assets which led to the oil sell off. In addition, the Fed rate cut and massive risk aversion led to zero percentage t-bills and the bond market rally. Both assets seem to have moved in an extreme manner due to the crisis condition of the financial market. Should we see any relief of the present condition, we expect unwind of some of these moves.

Look at the chart below showing the ratio of 10y Treasury price versus WTI crude oil, are we approaching a bubble territory? While, deflation can last longer and risk aversion may continue for a while, this is one bubble we are watching.

Beautiful Gold Coin - 2009 design from US Mint

Wednesday, December 24, 2008 | posted by RedApple
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One of the blog I follow: Mint News Blog talked about the upcoming 2009 design from US Mint (
Mint News Blog - 2009 Ultra High Relief Double Eagle Coins - 12 Dec 2008). I must say that the new design (strictly a re-design from it 1907 ultra high relief double eagle coin) is beautiful and if any of my readers are considering buying physical gold coins, as recommended by Marc Faber, one may want to add this coin to the shopping list.

According to the US Mint website (US Mint - 2009 Scheduled Products Listing) this coin will be on sale 22 Jan 2009.

27 dec 2008 - I added this link for reader's benefit (Gold Investment Blog - How to Buy American Eagle Coins - July 2008)

***** Update 28 Dec 2008 - for latest news and charting for Gold and Gold stocks, please check updates from our blog: Gold Boom Doom - Gold Related Blogs