MARC FABER: US Treasuries Remind Me Of The Nasdaq In 1999--The Biggest Bubble Ever

Business Insider ^ | June 11, 2012 | Ben Duronio

[SteelToe]

Marc Faber of the Gloom, Boom, and Doom report appeared on Bloomberg T.V. recently, discussing the current bull market around U.S. Treasuries.

The host asked if U.S. Treasuries are "the biggest bubble ever." Faber's response was "yes."

If you me asked about the Nasdaq in December 1999, I would have said this is the biggest bubble ever. And yet the Nasdaq continued to go up 30 percent until March 21 2000, and then what happened and how have these people faired since they invested in the Nasdaq in the final months of 1999 and early months of 2000? It's been a disaster.

And I think the government bonds bubble will also burst, but I don't know if it's tomorrow or in three months. I suspect actually maybe sooner than later, because the consensus is now buy US government bonds.

You've been warned.

[grumpygresh]

VIPSX.

[jjsheridan5]

I don’t believe that treasuries are actually in a bubble. Housing was a bubble caused by cheap money, easy financing, and insane government policies. This is different. This is the market betting on deflation, despite the fact that central banks are going to end up buying everything from bad debt to used candy wrappers. Treasuries seem relatively expensive because there really isn’t any safe place to store wealth, and, if anything, they are cheap — if the deflationary forces are as powerful as people suspect them to be.

IMHO, treasuries will be the last thing to go. During the European collapse (which hasn’t really started yet), US debt (as well as English, German and Japanese debt) will become very crowded.