Obama’s New Stimulus Plan May Be the Needle That Pops the Treasury-Bond Bubble

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Frighteningly, like the rush into tech stocks, then the rush into real estate, and then the rush into commodities, the rush into U.S. government bonds has created a Treasury bubble. In a cruel twist of economic fate, passage of an aggressive Obama administration stimulus plan could further inflate that bubble – before popping it.

The United States of America is an expensive household to run. In order to pay the nation's bills, the U.S. government levies taxes. When expenditures exceed tax revenue, the government has to borrow money. The United States borrows money by ordering the Treasury Department to sell government IOUs to investors in the form of Treasury bills, notes and bonds, known as "Treasuries."

How much does the government owe? As of Friday, according to TreasuryDirect.gov, total U.S. public debt stood at $10,620,397,126,433.54 ($10.62 trillion) – and counting.

About the Author

Shah Gilani is the Event Trading Specialist for Money Map Press. He provides specific trading recommendations in Capital Wave Forecast, where he predicts gigantic "waves" of money forming and shows you how to play them for the biggest gains. In Short-Side Fortunes, Shah shows the "little guy" how to make massive size gains – sometimes in a single day – by flipping large asset classes like stocks, bonds, commodities, ETFs and more. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

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