Economic Historian and Author, H. L. Quist, Sees Positive Market Change Ahead

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Outflows from US Treasury Debt Will Fuel Gains in Several Sectors, Quist Says.

looking for opportunity and outsized gains

H. L. Quist, author and Economic Historian, claims that the near unprecedented Bull Market in Treasury debt has reached "Bubble."

In the past year, as the stock market began its precipitous decline and the housing and credit sector worsened, investors sought the safe-haven of US Treasuries, preparing for a recession or even a depression economy. Demand has been so great that yields have reached historic lows. One and two month T-bills pay less than one-tenth of one percent whereas they were about 5% in August 2007. Two year yields are now below one percent and the bellwether ten year note currently yields under 3%. Although investors were principally seeking safety, those that bought Treasury debt a year ago have also enjoyed huge realized and un-realized capital gains (as yields decline the principal market value of the bond increases). "These investors who recognize they're in a T-debt bubble will soon nail down the Treasury debt profits and re-deploy that capital," says Quist.

Most market mavens and economists predict there will be a slow road to recovery in both the equity and real estate sectors. Quist (now known as "The Myth Buster") doesn't agree. "There isn't an easy way to quantify the amount of capital that will be re-deployed from Treasuries elsewhere, but I suspect that a considerable amount of the multi-trillions is not traditional, patient money. It's "smart money" looking for opportunity and outsized gains," says Quist, who has been involved in equity and real estate markets for forty-eight years. "A strong bear market rally in equities could begin anytime," he added.

Historically, this period could be similar to the mid-70's when the oil embargo and Nixon's resignation caused the stock market to decline 50%. Within eighteen months of Jimmy Carter's presidency, however, the market fully recovered, but later faltered as severe inflation crippled the economy. "Hopefully, the Obama administration will learn from the past and avoid the dreaded "I" word," Quist said.

H. L. Quist is the author of "The Aftermath of Greed: Get Ready For The Coming Inflationary Boom." He is also the author of 3 other non-fiction and fiction books, and hosts his own radio show "The Myth Buster."

H L Quist

The Myth Buster Show
Monday's 1-2 p.m.
KFNN 1510AM, Phoenix


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