New from Uncle Sam: Treasury Zero

It's coming, and you know it; also on the way: euro a go-go and fiduciary fade out

For all of us who wish the 2012 elections could be held this spring to spare us an additional six months of political and pundit bloviation, here’s my impatient call to get things moving on three other fronts.
First, consider Wednesday’s sale of 10-year Treasury notes. Priced at historic lows and with a yield of anorexic 1.91%, they flew off the shelf like free golf tchotchkes at a Schwab conference.
For who knows how long, every expert and wannabe expert has predicted that this couldn’t happen. It’s simply impossible to have such low interest rates or, on the other side of the same coin, such insatiable demand for the debt of Uncle Sam.
After all, America is falling apart, the experts opined. The dollar is worthless. And inflation is just around the corner.
Bull-oney.
Let’s stop all this “interest rates are going up” nonsense and cut to the chase: Interest rates soon will be zero.
That’s right. America may be a debt-riddled shell of its former self, but we’re all the world’s got. Every last peso, centime and anything else not lost in a sofa somewhere is pouring into the U.S., so let’s embrace Treasury Zero. Afterall, if Zero’s good enough for Coke, it’s good enough for America.
That will drive money fund yields down to about 0.000001%, mortgages to 1% for those few people who have jobs and can afford to buy a house, and credit cards to about 22% (banks can only move fast when they need government guarantees).
Next up: Let’s stop doing the endless waltz of the euro. It’s time to cut to the chase and kill off the ersatz currency, whose creation made as much sense as putting a Mercedes engine in a Renault.
God doesn’t want Greeks to make machine tools, he wants them to take care of German tourists. So let’s stop the insanity and go back to all those beautiful, phony-looking drachmas, deutsche marks and dinars. They were more real than the euro.
Finally, let’s cut to the chase regarding standards of care and realize that we’ll never have a real fiduciary standard for advisers.
It’s not that the party line from the brokerage firms is so compelling. Their view that a nonadulterated fiduciary standard is too complicated to put into effect and that it will deny less affluent investors an opportunity to access advice is self-serving spin.
No matter. It’s enough for Congress.
Since Mr. and Mrs. Average Investor don’t grease the pockets of congressmen, don’t expect our elected officials to do what’s right for most people. They’re more interested in doing what’s right for themselves and getting re-elected. And that means keeping the fiduciary issue in limbo for as long as possible (which keeps those PAC dollars flowing in) until everyone but the defenders of the status quo gives up in exhaustion.
So caveat investor, go long Treasuries and put a euro in the drawer where you keep your Confederate scrip.