Originally Posted by ScaredtoQuit
A friend of mine claims that this policy is manifesting itself in the form of the Chinese (and the Indonesians too) dumping treasury bonds in the market. He also claims that once the dumping is completed, rates will decline because all the other indicators point to a lower rate.
Does this seem reasonable to anyone? Does anyone have a feel for when the dumping would be completed? Any other insights? The decision of which month I retire in could have a very big impact on my nestegg.
Scared, we've had plenty of posters on this board who were in your situation. For whatever reason they hesitated to ER, now that they're in ER they've almost all looked back on their concerns and wondered what the heck they were worried about.
You seem to be elevating the ER worry to an art form worthy of the Louvre. But that's just my opinion and you have to work things out for yourself.
Your logic about the Chinese is correct although we don't know the timing. The Chinese will dump Treasuries until the yield goes back up, and then someone will probably start a buying stampede again. Unless the euro takes off, or the Saudis get frisky, or there's another terrorist attack. Nothing artificial about this demand-- everyone in the world is selling us stuff that we're buying with cheap dollars. If they want their profits to stop eroding as the dollar drops then they have to buy Treasuries or other country's paper. If you want more of a perspective on the mechanics of the trade imbalance, you could read Andy Kessler's "How We Got Here"
or "Running Money"
. He calls it "We think, they sweat", and it's not as bad as everyone seems to think.
But I don't think the Chinese are going to tell anyone when they'll be done dumping.
If your ER is riding on such a sensitive issue as Chinese Treasury dumping making a difference of a few percent in your lump sum, then perhaps your ER plans are pushing the envelope too hard. You may need to take another look at your expenses or your asset allocation or just pile up a bigger cushion against these types of shocks.
But I think that a decade from now you'll look back on this lump-sum question and shake your head wondering what the heck you were worrying about.