US Treasuries are not behaving the way that they "normally" should.
We say this looking at strong equity, commodity, and precious metal prices. The price of US Treasuries should be falling, or at best not rising. Rising gold, silver, platinum, copper, equites, et al, seemingly are good for US Treasury prices.
Rising prices of precious metals should be seen as inflationary; so how US Treasury prices rise
Here is another thought; in six months from now, Gold could be trading at around $1300 and Silver at $25, if current trends continue. Where would US 10 & 30 year Treasuries be trading then?
Is the activity in the US Treasury market the real deal? Is it correctly anticipating a "deflationary" and/or low growth environment? Perhaps commodity prices are about to implode as last year. Or are precious metals and commodities suggesting something about US Treasury prices.
We think that the real deal lies with the behavior in commodities (precious metals in particular), equities, and the TIP:US 10yr spread - that is, US Treasury markets are on the verge of falling into the abyss rather than commodities.
