7 Stimulus Trades That No One is Talking About

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A Bonus Trade

We are currently are borrowing surreal amounts of money and will probably borrow even more before all is said and done -- maybe as much as a trillion dollars for the new deficit, plus the rollover of a lot of debt. Right now the dollar and Treasury as a safe haven are keeping rates very low, but this, too, shall pass. Once people feel comfortable buying commercial paper and bonds issued by risky governments such as the U.K. and France, demand for our debt will fall and interest rates will eventually go up. There's nothing the Democrats or the Republicans can do about this.

Recommendation:  There are two ETFs you can buy. Both are double short -- they go up 2% for every 1% bond prices fall -- the UltraShort Lehman 7-10 Yr Treasury ProShares (PST), which shorts 7-10-year T bills, and the UltraShort Lehman 20+ Treasury ProShares (TBT), which shorts 20-year-plus T-bills.

This is a very, very long-term trade -- you do not need to put it on right now, T Bills may actually rally if and when there is a major bank failure in Europe. Keep an eye on this one, but this is a good trade, perhaps for later in the year or 2010.

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