ChineseRestaurantCapitalism

keeping the economy honest

Are you holding US Treasury Bond?

Bill Gross, the Bond King, dumped all of its U.S. government debt holdings from its $238-billion (U.S.) Total Return Fund, the world’s largest bond fund. His reasoning was the fact that the Fed accounts for about 70% of bond-buying activity right now, which means Federal Reserve is effectively printing money through its so-called Quantitative Easing to support U.S. Government borrowing. QE2 is scheduled to end at the end of June and if there’s no additional treasury buyer to pick up the slack, the interest rate has to go up and the bond price will fall.

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