Bad Omen: As Economy Sinks,Treasury Yields Rise

"Amid the worst economic contraction since 1982, bond yields should be plunging...but that's certainly not the case since mid-January as Treasury bonds continue to decline in value," says Investment Director Eric Roseman, "If the economy is so badly fractured then why are bond yields rising?"

"Since the beginning of the year the yield on the benchmark ten-year Treasury bond has surged almost 100 basis points from 2.25% to 3.03%. The 30-year T-bond has declined even more as yields have climbed from 2.68% on January 1 to 3.71%."

"The Treasury has been on steroids this year issuing a blitz of paper; more than US$94 billion dollars has already been raised over the last two weeks alone. The Treasury has even reintroduced the one, three and seven year notes again this year to its menu as it seeks to raise cash to finance the government's bulging spending plans."

"Increasingly, it seems, investors can't absorb the entirety of government bond supply."

"The Fed has even warned the market that it won't hesitate to buy back Treasury paper, if necessary. That ranks as potentially highly inflationary as the central bank will have to print money to absorb excess bond supply."

"Another major problem for U.S. funding lies across the Pacific where America's first and second largest Treasury investors, the Chinese and Japanese, are being squeezed by a collapse in exports and declining trade surpluses."

"China, the biggest Treasury consumer by far, will need to recycle a fair share of its surpluses this year to boost domestic spending; it's fair to assume that China won't be able to absorb the same level of Treasury purchases as it did prior to the subprime collapse. That's also putting pressure on Treasury yields."

"I'm not sure exactly why U.S. Treasury bond yields are rising since the beginning of the year. It might be the Chinese and other foreign investors paring their purchases to fund their own domestic spending plans or just too much supply saturating the market."

"Yet one thing seems certain: If bond prices can't rally on a string of morbid economic data over the last eight weeks then something is seriously wrong with the Treasury market. Betting against or shorting long-term Treasury bonds remains a strong speculation over the next 36 months as the United States dumps trillions of dollars' worth of supply onto the market. And too much supply isn't a good thing."

The link below will take you to a somewhat lengthy piece by Paul Craig Roberts (a former Treasury official).

It is NOT an easy read: Economics is called the dismal science for good reason. That’s especially true of the cockamamie, voodoo economics birthed by the gang now infesting Washington, Wall Street and the corporate suites of this country.

It is NOT a FUN read: Reading what could be America’s obituary could only be amusing to the criminally deranged.
Roberts hits all the notes in this piece — INCLUDING a common-sense, no cost solution to the current mess.

Let me hasten to say that I have been skeptical of the FREE TRADE crowd for some time. I understand the belief of some that if GOODS don’t freely cross borders, TROOPS WILL. I also understand that if America continues down this suicidal path of goods crossing OUR borders INBOUND while our MANUFACTURING and JOBS pass them on the way OUT, troops WILL soon be crossing our border – joining those goods INBOUND — in an INVASION after we have pissed away our ability to produce the materiel with which we might have repelled it.

As an UNABASHED AMERICA FIRSTER, I favor a nationalistic/patriotically based FAIR TRADE of the sort the mega-corporations threw under the bus decades ago. That attitude was typified years ago in a comment made by Walter Wriston, former head of CITICORP (GEE, THERE’S A NAME IN THE NEWS!) when he was chided for loaning to — thereby PROPPING UP — some of the most brutal and murderous communist (and non-communist) regimes on the planet:

“The form of government in these nations is of no concern to us. All that matters is CAN THEY PAY THEIR BILLS?”

That Walter was a real humanitarian, wasn’t he?

To far too many of these corporate heads and globalist politicians, the place called America is simply the name of a particular land mass on planet earth. The IDEA of America is about as important to them as was Wriston’s concern that his “loans” (most of which were — unbeknownst to them — underwritten by American taxpayers) were enabling tyrants to butcher countless millions of their citizens.

That America will someday disappear into some one-world miasma doesn’t bother them in the least.

I HOPE it bothers you. I pray that it bothers most those of you with children and grandchildren. When once asked if his interventionist and inflationary policies wouldn’t, in the end, destroy the nation, John Maynard Keynes responded that “In the end, we’ll all be dead.”

I hope this piece bothers you to the point of sharing it with others and prompts you to speak out in opposition to the continuation of America’s further decline and, eventually, our demise.

Please remember that, so far at least, YOU ARE NOT POWERLESS TO AFFECT THE OUTCOME OF THIS STRUGGLE.

Start raising hell with your elected representatives — at all levels — until they begin to get their minds right on this issue.

http://informationclearinghouse.info/article22087.htm

You mean BESIDES the 20 million Mexican and Central Americans who are already here and the unknown number of MUSLIM EXTREMISTS who have slipped in masquerading as latinos seeking jobs here?

And you do understand that a nation that fails to recognize and defend its borders is not really a nation?

And I trust you further understand that your position is precisely that of the corporate/political elite who are moving the denizens of what used to be America away from any comprehension of the concept of reasonable nation sovereignty in order to blend us into their totalitarian one world egalitarian utopia where, of course, SOME will be far more equal than others?

My guess is that you absolutely do not grasp any of those ideas as whacky conspiracy nonsense.
**********
Carroll Quigley was Bill Clinton’s MENTOR at Georgetown and he praised Quigley in his acceptance speech, thanking him for forming his world-view.

Conspiracy?? NAAAHHHHH!!

“Tragedy & Hope” Carroll Quigley, Macmillan Co, NY 1966 Partial pages 949-950

The radical Right version of these events as written up by John T. Flynn, Freda Utley, and others, was even more remote from the truth than were Budenz’s or Bentley’s versions, although it had a tremendous impact on American opinion and American relations with other counties in the years 1947-1955. This radical Right fairy tale, which is now an accepted folk myth in many groups in America, pictured the recent history of the United States, in regard to domestic reform and in foreign affairs, as a well-organized plot by extreme Left-wing elements, operating from the White House itself and controlling all the chief avenues of publicity in the United States, to destroy the American way of life, based on private enterprise, laissez faire, and isolationism, in behalf of alien ideologies of Russian Socialism and British cosmopolitanism (or internationalism). This plot, if we are to believe the myth, worked through such avenues of publicity as The New York Times and the Herald Tribune, the Christian Science Monitor and the Washington Post, the Atlantic Monthly and Harper’s Magazine and had at its core the wild-eyed and bushy-haired theoreticians of Socialist Harvard and the London School of Economics. It was determined to bring the United States into World War II on the side of England (Roosevelt’s first love) and Soviet Russia (his second love) in order to destroy every finer element of American life and, as part of this consciously planned scheme, invited Japan to attack Pearl Harbor, and destroyed Chiang Kai-shek, all the while undermining America’s real strength by excessive spending and unbalanced budgets.

This myth, like all fables, does in fact have a modicum of truth. There does exist, and has existed for a generation, an international Anglophile network which operates, to some extent, in the way the radical Right believes the Communists act. In fact, this network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. I have objected, both in the past and recently, to a few of its policies (notably to its belief that England was an Atlantic rather than a European Power and must be allied, or even federated, with the United States and must remain isolated from Europe, but in general my chief difference of opinion IS THAT IT WISHES TO REMAIN UNKNOWN (emphasis added) and I believe its role in history is significant enough to be known.

The Round Table Groups have already been mentioned in this book several times, n6tably in connection with the formation of the British Commonwealth in chapter 4 and in the discussion of appeasement in chapter 12 (”the Cliveden Set”). At the risk of some repetition, the story will be summarized here, because the’ American branch of this organization (sometimes called the “Eastern Establishment”) has played a very significant role in the history of the United States in the last generation.

The Round Table’ Groups were semi-secret discussion and lobbying groups organized by Lionel Curtis, Philip H. Kerr (Lord Lothian), and (Sir) William S. Marris in 1908-1911. This was done on behalf of Lord Milner, the dominant Trustee of the Rhodes Trust in the two decades 1905-1925.

The original purpose of these groups was to seek to federate the English-speaking world along lines laid down by Cecil Rhodes (I 853-1902) and William T. Stead (1849-1912), and the money for the organizational work came originally from the Rhodes Trust. By 1915 Round Table groups existed in seven countries, including England, South Africa, Canada, Australia, New Zealand, India, and a rather loosely organized group in the United States (George Louis Beer, Walter Lippmann, Frank Aydelotte, Whitney Shepardson, Thomas W. Lamont, Jerome D. Greene, Erwin D. Canham of the Christian Science Monitor, and others). The attitudes of the various groups were coordinated by frequent visits and discussions and by a well-informed and totally anonymous quarterly magazine, The Round Table, whose first issue, largely written by Philip Kerr, appeared in November 1910.

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