Here's The Bond Chart That Bill Gross Doesn't Want You To See

Bill Gross' PIMCO is short Treasuries, and he's been very vocal about this idea that interest rates will rise once QE2 ends because, well... who's going to be there to buy the bonds?

There's just one teeny problem.

As this chart from rival bond manager Jeff Gundlach (via ZeroHedge) makes clear the pattern is exactly the opposite of what Gross suggests. When QE is happening, yields rise. When there's no QE, yields fall. It seems illogical, unless you think of it, as we've urged like this: QE raises the appeal of risk assets. When there's no QE, the appeal of risk-less assets (bonds) rises.

Click to enlarge.

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See Also:

• PIMCO Officially Goes SHORT The US Treasury Market
• The One Thing You Must Realize About PIMCO's Big Bet Against Treasuries
• Here's What Happened The Last Time Bill Gross Made A Huge Bet Against Bonds

Source: http://feedproxy.google.com/~r/TheMoneyGame/~3/n2Jk22lWsS8/whats-the-impact-of-quantitative-easing-on-interest-rates-2011-4

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