Posted on 06/01/2009 1:38:05 PM PDT by FromLori
The Federal Reserve appears to be increasingly nervous about the long term bond market. This is serious. How panicked are they? After leaking a story on Friday, they are back at it on Sunday.
The Federal Reserve leaked to CNBC's Steve Liesman on Friday that they weren't targeting long rates. Why such a leak? Probably because the Fed did not want to appear impotent in controlling the long rate. So they put out the word through Liesman that they weren't targetting the long rate. Can you imagine what would happen to the markets if it sensed long rates were beyond the control of the Fed?
The Fed can of course print money to buy up every Treasury bond in existence, but the inflationary ramifications would be Zimbabwe like, and crush the dollar on international currency markets. Are we near the phase where all hell breaks loose? I have never even answered, maybe, to this question before. It's always been, "no." Now it's maybe.
What really has me spooked is another article out this afternoon (on a Sunday) that Drudge has even picked up. It's a Reuters story by Alister Bull. The headline: Federal Reserve puzzled by yield curve steepening.
Translation, the Fed doesn't know what is going on, but they are really scared.
Here's more from Bull:
(Excerpt) Read more at economicpolicyjournal.com ...
I predict we will have a second civil war, the seeds have been planted.
I saw a fellow on FoxNews recently saying the same thing. The title of the segment was The Greatest Depression. He said the big harumph!!! was coming. A total collapse of the dollar. Funny how all the doom and gloomer conservatives think Barry is a shoe in and how the country will gladly hand over their properity for free healthcare and a job pressure cleaning a rusty bridge.. After the sheeple can’t afford a night out at Applebees once a week, Barry will be lucky to make it out his first term. We love our consuming, our IPODS, our dinners out, 5 dollar beers, trips to the local amusement park. Once those days are over, the can of whoop as* will be opened with a ferocity that will make BDS look mild. The African American community will be set back 60 years. A mealnine rich person won’t sniff the Whitehouse again unless he’she on staff there for 100 years. This grand experiment in white guilt will end in a thud with 15-20% unemployment and crime at record levels.
The problem with the bond market is really pretty simple:
If the govt can force bondholders in GM to take pennies on the dollar, what prevents them from forcing all holders of US debt to take pennies on the dollar?
Secured and Treasury debt used to be the safest investment and preferable in risk to that of equity ownership such as stocks.
That has all changed with Zero in power.
Being 'smarter than the average bear' is not always a blessing...
What do you mean? Don’t you understand? This IS the revolution. Every communist revolution involves the destruction of the existing cultural and economic order, particularly the middle class. We are all kulaks, headed for the “security” of the collective farm.
It’s deliberate.
As are the rest of us (resigned to watching) and trying to prepare for the worse that is yet to come. China has been quietly stopping the purchasing of our debt and would probably bolt if they did not think they would lose heavily as it is they have been changing their habits and investing in short term now.
I see a second civil war coming. The seeds have been planted.
I thought the Messiah said we are going to hit bottom hard; skid our bottoms until they are raw and hit that pesky embankment hard as hell.
BUT the market was up 230 points today. NOTHING CAN GO WRONG< NOTHING CAN GO WRONG< NOTHING CAN GO WRONG
bflr
and
bttt
You have probably missed out on the currency exchange, but you could get on the back order list.
The new currency is
ammo.
Dow is up - the shorts are covering
Don’t go to India. It WILL be attacked by Pakistan and/or China/Russia.
However, the US will fair little better, as it will bear the brunt of any attack by the “Ex” Soviet/Chicom alliance.
Even though HE is part of the problem with the Demorats controlling Congress and the Senate for the past 4 1/2 years along with gutless RINOS without any gnads.
bookmark
I've read that Argentinian guy's blog....are we talking like that? Will we have jobs or grocery stores or banks? Or will it be more like Mad Max's world, every man or woman for themselves?
Besides buying gold and silver, does anybody have any idea on how to prepare for rampant inflation?
That’s the dichotomy that I was fighting on this. Being in the US during the collapse won’t be healthy, but the political instability brought by the collapse will invite every dictator-with-a-funny-hat to settle their own feuds. The only ace in the hole that I have in India is that one of my relatives there is an MP, so I would have access that most wouldn’t.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.