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 ...
When we see the Obama administration leasing offshore oil leases, you will know they are in a panic.
That was today, I'm talking about yesterday. ; )
It worked for Carter.
This sucks!
Yes it sure does but better to know and prepare.
Barter bucks are already in short supply. Barter bucks (ammo) is getting tougher and tougher to get.
I totally agree with you but one can only prepare so much. I can only buy so much food. I can only provide a temporary cushion.
You’re being very optimistic aren’t you?
You mean Ferfal... yeah, I have been checking into his site alot lately.
He recommends everybody invest in a Glock 19. Unfortunately, I dont have that type of money right now.
LOL
Folks, the inflation story is dead as a doornail but the men who lost their shirts betting on it will never give it up. They will predict it for the next hundred years.
“.....an inheritance from the Bush Administration”
“an inheritance from a Democrat House and Senate”
No No No-you picked the right week to quit drinking. Think of what your are going to do with all that money you’ve been flushing (or puking) down the toilet. Fake it until you make it.
They both traded all day.
But all these things are slightly better than the Wall Street Wizards predicted by pulling numbers out of their behinds so the market is going up come hell or high water.
At least that's what all the experts who missed the bear are telling me so who am I not to believe the experts?
Sorry to repeat the link - didn’t mean to. But the article is still scary.
So as several in the Obama administration repeated, "Never let a catastrophe go to waste!" Of course, the administration (both Bush and Obama) did little to 'reign in' exorbitant levereged positions by hedge funds and Investment Banks. This was allowed by repeal of Glass Steagall. Then last September 16, 2008, a day which will live in enfamy, the hedge funds burned the House of Lehmans to the ground, an event which did not have to occur. Think, if the government had put a l ittle money in Lehmans (like it did AIG, GM, Crysler,...just a fraction, this event which has been forcasted as inevitable by most Austrian economists could have been averted. Bush, Paulson, Bernanke, Gaitner, Obama, they all know this, yet they continue to do exactly what is contraindicated....you do not raise taxes in a recession/depression, profligate spending out as far as they eye can see. But that tool of Lehmans failure was the tiny spark which ignited the inevitable...it set into motion events beyond even their control....it set into motion the demand performance of the counterparties of structured default swaps (derivitives). Paulson, if you listened carefully, said as much as far back as late Sept 2008.
This process, like a nuclear chain reaction, is in process of destroying our country, so that from the ashes a New Wold Order can rise from the ashes. It has begun and it accellerates as we sleep tonight. Think.....last week Bernanke bought much of the initial offerings of the Treasury Bills, when the bidding began. Think about it, if you loaned yourself money to fund your debt. It is illogical. This is called monitizing of the debt. Now, as this articles intimates, the long bonds are in question. The USA has long term obligations of about 55 trillion dollars. That is debt which will paid for by your children and grandchildren so that the Communist Chinese will be paid. Our posterity are being groomed to be the slaves of Communist Chinese.
Most do not see it, but it is not under control of the FED, or Obama, or Gaithner. They are like the little Dutch boy trying to plug the holes with their fingers and toes so this unwinding of derivitives does not occur so fast as to create civil unrest, but make no mistake,...there is nothing on this earth which will stop it. Nothing!
Unless this country, which is in technical default, does what most buisnesses will have to do, and declares chapter 11 or chapter 7 and reorganizes and reclaimes the FREEDOMS of our precious Constitution, (I see no real hope for that) then our future is on of rapid decline, decay, and destruction.
As the songwriter said, "Will the ruin come with pain? Can a life removed remain? Will a nation need forgiveness in us all? Can we change what's right from wrong, can we leave and still belong? Or have we lost that precious gift that we once had? (freedom). I don't know, I don't know.
Anyway, this is Captain Sunshine...signing off.
In the very short run, markets can be irrational.
Look at today, darn near everything was up, clearly some of it was wrong.
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