It’s patriotic. No, seriously, I really like the 10-year note here. Today’s much talked about auction had the highest bid to cover ratio of any since mid-2007 according to Bloomberg, with plenty of interest from overseas investors. 4% is a pretty darned good yield considering that Case-Shiller CPI is running at negative 5%. 9% is a good yield in any security, let alone Treasuries in a depression.

Technically, I like this chart. Yields have now corrected the overshoot to the downside that we saw in December, but have not broken out so far that you could say the Treasury bull market is over:

-

I don’t know what inflation will be 10 years from now, or even the stability of the world’s fiat currency regime, but from a trading point of view, I suspect that dollar and inflation fears have run their course for this round. Traders seem to have forgotten that for the growing ranks of individuals who have lost their jobs but not their debt, or for businesses experiencing month after month of losses, cash is most definitely not trash.

As I said last Friday, I think we are at a turning point where various assets are peaking or bottoming more or less in synch. Gold, silver, the euro and pound may have printed their highs last week, while we are still waiting for oil and bonds to make a reversal. If all of these assets do actually turn, I would be highly surprised if the equities markets didn’t follow suit.