Once the 28 year up-trend in the USA long bonds breaks down, rallies can be shorted with impunity.

The final Pillar of Gold’s major bull market and price appreciation to $1650 and above will be set into place.

Treasurys decline, weighed by Beige Book
Decent demand at auction of 10-year notes not helping
By Deborah Levine, MarketWatch
Jan. 13, 2010, 3:34 p.m. EST

NEW YORK (MarketWatch) — Treasury prices declined on Wednesday, extending losses in the afternoon and reversing much of Tuesday’s gains after the Federal Reserve’s latest snapshot report on the economy said the Christmas retail season was better than last year but still far below 2007.

The sell-off began early in the session, extending after the government’s auction of $21 billion in 10-year notes despite attracting good demand from investors. Traders noted concerns about demand for the last of four big auctions for the week when the Treasury sells 30-year bonds on Thursday.

Yields on 10-year notes (UST10Y 3.79, +0.08, +2.10%), which move inversely to prices, rose 8 basis points to 3.79%. A basis point is 0.01 percentage point. The yield dropped 10 basis points on Tuesday, the biggest decline since mid-December.

Yields on 2-year notes (UST2YR 0.95, +0.05, +5.78%)increased 5 basis points to 0.96%, after falling in the past three sessions.

More of the Fed’s districts reported some increase in activity or improvement in conditions, according to the so-called Beige Book, which is used by policy makers at their rate-setting meeting at the end of the month.

The report also notes very low inflation pressures, as analysts expected, giving officials no reason to change its promise to keep benchmark interest rates low for an extended period.

More…