I used to wonder if the Fed could ever get more stupid. But they never seem to disappoint. Taking long rates down just digs a deeper hole. We are never ever ever going to pay back those 10 years (never mind 30 years) with paper worth anything close to today’s. The buyers will be lucky if we simply don’t default. So this bubble in long bond prices will certainly pop and the bigger the bubble the worse will be the effects of the pop.
It seems almost everyone in a position of leadership in this nation is trying to push the coming disaster on beyond their time of service. But, as I wrote our governor when he declined to run for president due to “family issues”, when this blows, all their families are going down right along with mine.
I’ve got 2 banks battling for my Refi and when I asked them what today’s rates were, given the 11 basis point drop in the 10 year bond, they said “no change from yesterday”!!