In light of the longer term treasury rates status at 'do or die' levels (signifying the inflection point at which the macro switch either remains status quo or gets flipped as inflationary horses break down the barn door) I have gotten a few emails asking about TBT (short the long bond) as a possible play. My advice? I ain't playin' nothin'.
If the switch flips, players may want to short the long bond. But my personal tack is to sit and wait for opportunity in sound things, like gold and gold stocks (well, to the extent that stocks can be thought of as sound). Later, things like resources and productive economies and sectors. But as for the treasury play, I shorted and longed the long bond successfully in 2009 and have no interest in going back for more at this time. That is because if you slop around with pigs long enough, you risk becoming one.
But I did buy more treasuries today and the attached charts show why. They are linear and log scale versions of the 3 month t-bill rate, showing both the low relative rate and the percentage move off the bottom. While pathetically low in the face of systematic and destructive inflationary policy, one might argue that there is no place to go but up (as the Fed wishy washily admitted last week). Treasury investors OWN T-BILLS IN A RISING RATE ENVIRONMENT. So, with the short end beginning to yield (no pun intended) to the pressures of the long end, I added positions in SHV in the speculative portfolio, as a place to park cash while awaiting more dynamic opportunity. Best case, I'll get fast turnover on rising rates, protection as good as government paper can get and increasing return. Worst case (if short rates somehow get re-pinned to the mat) there is the liquidity and protection (such as it is) of t-bills.
Other ways to play this are 'treasury only' money markets (Prechter put me on this course in 2002 with Conquer the Crash) or buying t-bills directly from Uncle Sam.
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