Monday, January 10, 2011

What The Heck? Is Bloomberg News Serious?

Take a look at this headline:

Wall Street Dumps Most Treasuries Since 2004 on Growth

You've got to be kidding me.  Wall Street has been "dumping" their Treasuries into the Fed, which has been printing money like a Weimar paper company for over 2 years now.  In fact, just last week, Wall Street unloaded over 1/2 of one of the most recent Treasury issues onto the Fed's balance sheet.

Here's the link to the Bloomberg fantasy report:  Dr. Mr. Fantasy

The golden Truth about rising Treasury yields (tanking prices) is 2-fold:  1)  Globally, investors are buying less Treauries because of the accelerating credit risk of the U.S. Government.  And the Fed/Treasury has a printing press, so outright default will not happen.  But when the Fed has to monetize new Treasury auctions like the one referenced above, that is a "de facto" default; 2) Accelerating inflation.  If you don't believe inflation is here, stay tuned.

It gets more surreal by the day, people...
“I, however, place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared.” - Thomas Jefferson

1 comment:

  1. Very interesting development.

    "Commonwealth of Virginia introduced House Resolution No. 557 to establish a joint subcommittee to "to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System." In other words, Virginia will study the fallback plan of a "timely adoption of an alternative sound currency that the Commonwealth's government and citizens may employ without delay in the event of the destruction of the Federal Reserve System's currency" and avoid or "at least mitigate many of the economic, social, and political shocks to be expected to arise from hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System." Most importantly as pertain to the currency in question, "Americans may employ whatever currency they choose to stipulate as the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a currency not redeemable in gold or silver that Congress may have designated 'legal tender'."