Wednesday, January 26, 2011

Goldman Selling 30-year Bonds, Claims Inflation Is Not A Concern

Reader CH pointed to this piece in Bloomberg, recounting how Goldman Sachs auctioned off $2.5 billion in 30-year bonds this past Monday; the bid-to-cover was 3.6.

The Death Star
at 85 Broad Street
Bloomberg reports that this is the first time in three years that GS has sold 30-years, and is claiming that this auction “signals waning investor concern that inflation is accelerating”.

We at The Hourly G beg to differ: If Goldman Sachs is selling 30-years, then they definitely think inflation is in the offing. Raising cash now through long-term debt—and then investing that cash in inflation-protected assets, such as commodities—is the way to take advantage of an inflationary environment.

That Goldman managed to scrounge up enough fools to buy these bonds does not “signal waning investor concern that inflation is accelerating”—it merely signals that Goldman is exceptionally adept at finding suckers in the market.


  1. The author of this article conveniently ignored the fact that Goldman was selling these bonds! Goldman could have borrowed on the shorter end and paid a lower rate, but decided on 30 years! Obviously, it is Goldman that thinks inflation is a problem and that rates are going to rise.

    A better headline would have been, "Goldman Sachs suckers its clients once again!"

  2. uh, nelson is it? if you're talking about Gonzalo forgetting to mention that goldman was selling these 30 year bonds he did mention it. If you're talking about bloomberg forgetting to mention it then they're purposefully doing that hoping no one will be ready when inflation turns into hyperinflation. my wife and I however are preparing to invest in food and a storage unit for the extra stockpiles of food before hyperinflation sets in.


Knock yourself out!

The cult of stability is a culture of death.