Hedge fund legend Julian Robertson is betting the farm against long-dated US Treasurys. As Notes readers will be aware, we have been banging the drum on the vulnerability of long-dated US debt for over a month now. But Robertson, of Tiger Management fame, has a different way to make this short long-term Treasurys play (hat tip Market Folly).

Robertson is shorting long-dated US debt using something called a steepener swap play. Although the mechanism of this trade may be unfamiliar, at heart it’s a simple bet on inflation.

Robertson reckons inflation could easily hit 7% and that it could even reach 18%. Again, Notes readers will be familiar with this market script. This from eFinancialNews:

Steepeners are a type of interest rate swap, where one party agrees to pay the other a fixed rate in exchange for

Yesterday, trigger-happy Fed head Ben Bernanke made it clear that he was on a mission to push long-term interest rates down to ‘stimulate’ the economy. This is a chance for you to make up to 17% profits. Let me explain…

As interest rates go down, bond prices rise. So all you need is an instrument that rises alongside bond prices to make money.

That instrument is iShares Barclays 20+ Year Treas.Bd ETF (NYSE:TLT)

As you can see from the chart above, after yesterday’s Fed announcement the TLT roared higher. And after making a move that massive - which is quite unprecedented in the bond market - today it consolidated some of those gains.

But don’t let today fool you.

Ben is crazy. And he’s going to do whatever it takes to push long-term interest rates down.

He’s already proven that by announcing