> If people refuse to buy out debt at 1% over 6 months, and 3% over a year, then they HAVE to raise rates. <
That’s an interesting argument. But the Fed recently stepped in and started buying US debt at the current low rates. Where they get the money to do that I have no idea.
They can do it, legally, in several ways: by borrowing against the future ledger (creating it by fiat), by selling shares of their own stock (the fed is a publicly traded company), or by swaps of stocks they hold from companies already in default. These are a few ways, and there are others. They just can’t ‘create’ money, though a number of their actions are largely equivalent to that. And thanks for the article. I had known they were doing that, I saw my holding in gov’t bills take a hit on the day they announced that (counter-intuitive as it was). It was the only day my portfolio, such as it is, took a hit these past few months, as I got out of the market last fall. Keep the faith, brother.