It has long been a given that economic Armageddon would commence with a run out of dollars and Treasury paper. But when? There are signs that enthusiasm for U.S. Bonds has been waning among some of our biggest lenders, bringing us closer to that potentially hyperinflationary day when the Fed and its dealer network are the only buyers of U.S. debt at auction.  Also, with Japan, currently the largest buyer of Treasuries, now seeking to promote domestic inflation of at least 3%, another source of support could weaken as they shift buying toward their own paper.

These are developments that could finally bring market forces to bear on U.S. debt, forcing the Fed’s hand toward a possible hyperinflation. For the time being, however, the ultimately flawed notion of T-Bonds as a safe haven holds sway among institutional lemmings, and that’s why we shouldn’t be so quick to write off the bonds merely because they have been falling since late November.  If you’re interested in a technical picture that supports this conclusion with one caveat, check out today’s T-Bond tout, which includes charts both the short-  and long-term. Click here to sample Rick’s Picks free for a week.