"The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.
Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market."
Bloomberg
This means that interest rates are going to start heading up. Couple this with all the money we've been printing and todays post from Swarm USA showing that every dollar of new debt (printing money) is taking forty five cents off the GDP, and it is becoming increasingly clear that our time before we collapse has grown short.
You see, as Karl Denninger at Market ticker explains, we are in a death spiral. As interest rates on our bonds go up we will have to print more money to service the debt. The more money we print the greater the impact on our GDP, which of course will have a negative impact on our creditworthiness, forcing interest rates higher.
The only way out is to reset the system, a task that our government does not have the stomach for because it would cost the wealthy players in the system too much money and damage the politicians. Not to mention just generally suck for the rest of us. But, if we do it in a controlled manner we can come out of it, maybe. We may be past the point of no return.
However, to do nothing, as we are doing now, will certainly result in the greatest depression and civil unrest; along with the potential destruction of our system of government.
Whichever way it goes, life as we have known it is in it's last days. Get ready, the time is short!
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