This daily chart for treasury futures shows a consolidation pattern developing at the loftly price levels that we've seen recently. Many prominent investors have been suggesting that U.S. treasuries are in bubble territory, and I've included some of those opinions in this blog. I haven't shorted treasuries, except on a short-term basis.There is a saying, "don't fight the Fed". As long as the Fed can continue to print money and and use those unlimited new funds to buy U.S. treasuries, it appears that shorting treasuries is a fight in futility. The Fed can always print more money and continue forcing interest rates lower by buying all the treasuries that the U.S. government wants to sell. It's going to be difficult for treasury bears to gain the upper hand as long as these conditions continue. However, I wouldn't be surprised if, at some point down the road, sentiment against U.S. government debt shifts strongly enough that the flight from treasuries is rapid, forceful, and devastating. One writer, whose name I don't recall now, a few weeks ago said that when this phenomena occurs, it will be "breathtaking". And that's an understatement!
