When the entire world is buying duration...

...the big boys start selling...and just as important, ANNOUNCING that they are selling.

Warren Buffett shortened the duration of bonds held by his Berkshire Hathaway Inc. after warning that deficit spending could force inflation higher.

Twenty-one percent of holdings including Treasuries, municipal debt, foreign-government securities and corporate bonds were due in one year or less as of June 30, Omaha, Nebraska-based Berkshire said in a filing Aug. 6. That compares with 18 percent on March 31, and 16 percent at the end of last year’s second quarter.
“It may be a sign that Buffett expects interest rates to start rising, maybe sooner than the conventional wisdom,” Meyer Shields, an analyst in Baltimore at Stifel Nicolaus & Co. who has a “sell” rating on Berkshire, said in an interview.

Inflation has fallen to a 44-year low even as the Federal Reserve more than doubled its balance sheet in two years to $2.33 trillion to help draw the economy out of recession. A U.S. jobs report last week showing that companies hired fewer workers than forecast in July pushed the two-year Treasury yield to a record low. Bill Gross, founder of Pacific Investment Management Co., advised investors to buy longer-dated maturities.