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Guggenheim Partners CIO Scott Minerd explains why shorting Treasuries is a good bet in the long run.
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In mess mean for us Scott miner is the chief investment officer at Guggenheim partners.
Which has over 100 billion dollars in assets under management as Scott good to see it.
-- on something that he said short treasuries back in March with all that trouble in Europe in part.
You would have made money if -- rural home treasuries that will not know -- short since March.
Well dinner date and I got -- -- that I know myself well enough that.
One of my biggest weaknesses -- -- probably moves too soon.
But.
I'm sure that -- the bad is a good -- in the long run and I I often quote Rothschild at moments like this.
Who when asked what the secretive -- great wealth was said he sold early.
So.
It's -- I was too early and I'm not -- per surprise that I am having to bear some pain that I think that in the end that's going to be the right trade.
-- if you bet against treasuries I'm assuming you do think that the problems in Europe are resolved how does that play out near run and long run.
Well actually I.
I I really don't think the problems in Europe are resolved in my bet against treasury uses.
A call that is really based upon the fact that.
Given all the problems in the world that at the end of the day central banks are gonna have to continue to flood the system with liquidity.
And with all this money getting printed around the world ultimately the only exit that we have from the existing problems both in the United States and Europe is -- -- higher levels of inflation.
And higher levels of inflation will ultimately lead to higher levels of interest rates.
That -- that very much so speaking of central banks.
-- -- gotten rather than focusing on Europe and I get to that -- -- and what about next week and do you expect any additional measures out of our own Federal Reserve.
I think the body line would shut -- against pretty good that they're they're going to announce someplace.
-- I believe.
The extension of Operation Twist is the most likely.
Intermediate step.
I think that that comments by some of the Fed presidents Janet Yellen and president Evans over the last two weeks tells us that they are ready to do more.
And the question really is are we gonna get around -- QE3.
And I think it's too early for the Fed to move on QE3 but I think before the end of the summer that there are likely to start turning on the printing presses printing money.
Well speaking of central banks look over to Europe we -- -- collections over the weekend.
A more worries still persist about Spain and what is next for the -- how concerned are you about Italy for example.
Well.
I think that you know after the bail out of Spain this week which.
No matter how you want to characterize that the it was a bail out of Spain even though they -- claimed there was a bail out of their banks.
But the only reason the European Union bailout the banks was because Spain didn't have enough money to do it themselves.
-- the reality is that was tantamount to waving a red -- in front of mobile.
And that is opened the a charge against Italy at this point.
And at some point Italy is going to come into question.
In terms of needing a bailout.
And I think in inevitably we will go down that road and have to bail out Italy also.
Other thing that's most concerning to me that date -- is that once we get to Italy.
The next candidate in line that's gonna get focus -- France.
And when we start focusing on France.
Then we have to consider whether Germany has all the resources in Europe that are necessary to save all of Europe.
And I think that the market will be highly suspicious of that.
And so I think it's very important that the policy makers in Europe and get us something in place now.
Before.
The market turns its sights on France and the prospects of of a problem in France or restructuring plan.
Scott you're right Europe's not gonna effect he's just convinced me and -- It was great to see you thank you so much for being united that you have a terrific weekend and go Dodgers -- how.
