Beware of the Treasury Market Bubble.

The Treasury market has been taking the stage lately, however not performing well. Last year Buffett claimed that investors running out to purchase T-Bills and paying pennies for them were making a huge mistake. As massive inflation came around as a result of the stimulus efforts, Treasuries found themselves just where housing was in the early 2000s. Interest rates flopped and prices rose up sky high. In December we saw 10yr Treasuries at 2.08%, in January at 2.4%, and by June already at 4%. Very unfortunate for all of the investors that overpaid for yields nearly 50% lower than current yields. Income generation and sell at a profit is not possible for these investors. What’s even worse at this point is that we see on daily basis politicians and the press speculating on government’s impact and how it will affect interest rates. A possible raise in inflation would drive these bond yields even lower.

Read more on Treasuries Market on Yahoo Finance.