Posted on 03/21/2015 6:55:02 AM PDT by Kaslin
Please note;
There was a time between 2002 and 2006 where the US stopped issuing 30yr bonds.
You should look at the 20yr during that period.
All they can do is to pretend their about to raise interest rates as some loosely based future circumstances demand and which never comes,
The minute interest rates are raised, we can no longer pay the interest on our debt, so inflation must never be acknowledged, its better for them that grandmas savings sit for years in bank CDs yielding zero than to allow their banker pals to feel any pain,
The DOW will increase in volatility and begin dropping without its sugar high fix because of low interest rates, where investors are seeking an outlet for any gains at all,
How long can this scheme continue? I don’t know? But probably much longer than most of us here believe, provided all things continue as they are today, and how likely is that?
All they can do is to pretend their about to raise interest rates as some loosely based future circumstances demand and which never comes,
The minute interest rates are raised, we can no longer pay the interest on our debt, so inflation must never be acknowledged
Actually, no.
The FED’s apparent end of QE* and talk of a rate increase has sent the US dollar on an upward trajectory that is historical in nature.
They can’t even “pretend” any longer that they will raise rates.
I wrote on 3/10;
“I would expect the FED to back off talk of a rate increase and possibly “Hint” that they may try another round of QE.
In order to do so they would have to talk down their recent comments about our economy being on the upswing and express concerns.”
http://www.freerepublic.com/perl/pings?more=377650445
This is exactly what they did.
And the dollar sold off and the market went up and now everyone is happy. /s
Something that I had failed to consider was disclosed by the FED this week.
The “Apparent” end of QE* !!!
It has not ended.
The FED owns a boat load of US Treasuries and as those bonds mature, they are recycling them back into the market.
They are doing so in order to keep rates down in the hopes that it will fuel economic growth.
This actually may work without the need to make any new purchases.
It’s pure Keynesian from the start and while I would have rather seen the economic cycle play out without intervention, at this point I think they need to see it through.
Good information, thanks,
And I was aware of this and wondered how far they could go?
“The FED owns a boat load of US Treasuries and as those bonds mature, they are recycling them back into the market.”
I cannot believe so many Wall Street “experts” fell for this interest rate Kabuki. Plain and simple, the Fed cannot raise interest rates. Okay, 25 basis points, at most, but that’s it.
I have an image of Wile E Coyote having run off a cliff and nothing happening until he looks down. The U.S. economy has arrived at the ludicrous point of now hanging on every word said by the Fed. Financial news reports the presence or absence of the word "patience". Really? This is now what drives the market?
very true, smoke and mirrors,
The fact that a Fed Chairman who might pause just a moment too long before answering some reporters question could then cause the market to start dropping,
That should tell anyone outside these schemes exactly how unsound our financial system really is,
The dollar will fall one way or the other. Sometime after the rate is increased, it will fall like a rock (see bonds, debts, activity, stocks, unemployment, etc.: vicious circle).
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