30 Year Rally In Bonds Over? Bill Gross, Jim Grant Bets House Plant's Life, TYX (30-Year Treasury Yield Index) Chart

The 30-Year Bond yield ($TYX) could be reversing its 30 year secular downtrend.  Check out the chart.  It is interesting that Bill Gross, the biggest bond fund manager in the world at Pimco, prefers stocks over bonds (CNBC Video).  Gross also mentioned that the US, UK and Japan have the ability to default through money printing (devaluation/reflation) which "produces lower prices in bonds and negative returns" and "there's an estimated $40 trillion present value of entitlements in the United States, and the recent health care reform has added about $500 billion to that... a trend nonetheless that suggests it's going higher and higher and higher" (Bill Gross Bloomberg Radio interview).

It would be interesting to see a big re-balancing out of bonds and into stocks going forward.  It wouldn't surprise me to see bond volatility soon (watch the $MOVE Index).  Look at the 30 year chart of the CBOE 30-Year Treasury Yield Index (symbol: TYX at FreeStockCharts.com). Technically, watch the downtrend resistance level closely and a potential base of support.

30-Year Treasury Yield Since 1980

Also Jim Grant (Grant's Interest Rate Observer) would bet on his houseplant's life that US Treasury Yields are likely to rise and he takes on the US Dollar (video below courtesy of Bloomberg).  Grant downgraded US Treasuries (see video).  If interested Jim Grant debated with David Rosenberg on Treasury Yields (link). David Rosenberg thinks Treasury yields are headed lower, taking the other side of Gregor Macdonald, Jim Grant and Bill Gross.


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