Well I suppose the answer to that is that we all do, cars for example.  But treasury notes!  A Bloomberg article  on Thursday says it all. Saying how there was a strong demand for the sale last week. The 7 year notes yeilded 3.53%.

But then the last paragraph of the article says “Treasuries are poised for their worst quarter since the first 3 months of 1980.  The securities have lost 3.8% since March 31.  If they lost 3.8% in a quarter and they are selling new ones with a yield of 3.53% a year then presumably these could lose everything in the next year. I really don’t understand their logic if this is the case. Maybe I’m missing something here. The current yield doesn’t seem to reflect the risk they are taking.

John Mauldin’s e-letter this week points out that we are not out of the woods yet.  If you don’t already get his free letter each week you can subscribe here. Perhaps I like him so much because I agree with him. Over time he has been the most accurate of all the analysts I have read. I didn’t used to agree with him, but over time he has been right and I have been wrong, so I have learned a lot from him.

So what happened this week?  So far attempts at window dressing have not happened.  The DJIA lost 103 points for the week, the S&P500 had a minimal loss of 1.8 points and the FTSE lost 110 points.  Of interest regarding the FTSE, every day last week the intraday low was within plus or minus 3 points of 4180.  We can say that 4180 is a support level worth watching.

China is again calling on the world to cut its reliance on the US dollar as the “reserve” currency.  They are promoting an IMF reserve currency made up of a basket of currencies.  If this does ever happen it will spell the end of the US as we know it today.  There will be no demand for US$ to buy commodities etc.  The world will be awash with US dollars rapidly depreciating.

In the US again another five banks have been seized by the government as they have become insolvent raising the total of bank failures this year to 45.