Erin Burnett Wrong! No!

I actually love Erin Burnett.  She is very good at her job, and does a fantastic job (at times) of delivering important financial news to the CNBC audience.  She is currently working to report from Egypt, and was apparently caught in crossfire during her assignment.   

I am not mad that she called Michael Pento rude, because he may have (like so many other heralded CNBC guests) pushed his opinions in an unfair and abusive way.  Michael Pento works for Euro Pacific Capital, under Peter Schiff, who I am a huge fan of.  This guy has been a bond bear for a long time, and it seems as if Michael Pento is joining in with the rest of Europac.  I am not even upset that Erin questions his calls.  At the time it certainly seemed like rates were going to stay low.  Fundamentally it seems wrong, but with the FED buying the long end of the curve, it could possibly be enough of a force to keep rates low. 

The chart above shows the yield on the 10 year US Treasury Note.  The yield on this security was 2.77% on the day of this interview.  Today, the 10 year US Treasury Note is trading at 3.32%, or 20% higher.  The reason I am upset with Erin seems to believe that the United States will always be the worlds reserve currency.  I am upset that she doesn't get the fact that demand for US Treasuries is not actually real.  It is a ploy by the FED to keep rates low.  Individual investors, institutional investors, and world governments including china are actually cutting the amount of Us Treasuries in their reserves.  Maybe it is my recent behavioral finance experience, which has led me to question market efficiency a bit more, but I don't think it is at all reasonable to expect that with increased fiscal irresponsibility that we will continue to see such high demand for what used to be considered the risk free security. 

Sorry Erin, I love your work, but you were so WRONG!!!