"The flight to safety during the collapse of the stock market in 2008 pushed yields on U.S. government bonds to levels not seen since the Fed began keeping records in 1962.

"Savvy investors know that anytime there are extremes in financial markets, there are also opportunities to profit. And the Rydex Inverse Government Long Bond Strategy Inverse is the best way to profit from the coming collapse in U.S. government bond prices.

"U.S. Treasuries are under increasing pressure from both the supply and demand side. On the supply side, the almost $1 trillion economic stimulus package contemplated by the U.S. government means that it will have to go hat in hand to the rest of the world even more than usual.

"Goldman Sachs estimates that the U.S. Treasury will have to raise more than $2.5 trillion in 2009 alone. That's more than $1.6 trillion more than the U.S. Treasury raised in all of 2008. That's an unprecedented level of supply coming on the market.

"It also means that the U.S. government will have to pay more and more interest on U.S. Treasuries to attract investors, pushing prices down, and the yields demanded by investors up.

"Second, the demand side of the equation looks scarcely better. Consider the case of China. As a result of the economic slowdown, U.S. consumers are buying a whole lot fewer things that say 'Made in China.'

"That means a lot less business for China's manufacturing sector. That means less tax revenue for the Chinese government. Less tax revenue leads to a lower budget surplus and a lower trade surplus with the United States.

"The result? You can expect that the amount of excess U.S. dollars that are funneled back from China into the Treasury market is set to decrease substantially.

"In addition there is the issue of coming inflation. Recent growth of the money supply suggests that it is only a matter of time until inflation will start to kick in.

"Finally, to add insult to injury, even good news is bad news for U.S. Treasuries. After the extreme rise in risk aversion during the October collapse, the frenzied safe haven buying of U.S. treasuries has come to an end.

"Let's say that central banks throwing everything and the kitchen sink at the credit crisis starts to work. Any relief in global financial markets will mean that money will come out of U.S. Treasuries and go somewhere else.

"This scenario is also bearish for bonds, and good news for RYJUX. So buy the Rydex Inverse Government Long Bond Strategy Inverse and place a trailing stop of 10%"

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.