FED warns of Bond Crisis

[Pauls' Revere]

I know someone posted the possibility of this and so it seems the FED agrees.

http://news.yahoo.com/s/nm/us_usa_economy_greenspan

"The big, serious problem is whether or not the outlook for the longer-term deficit spooks the bond market to a point where long-term interest and mortgage rates move up very sharply," said Greenspan. "If that happens, that will cause the double dip."

Greenspan caused a stir last week when he said in a Financial Times column that Washington was pursuing a policy of weakening the dollar, prompting Treasury Secretary Timothy Geithner to insist that the United States would never deliberately weaken its currency.
?

Ok, what happens when this comes to fruition

[hazek]

"The big, serious problem is whether or not the outlook for the longer-term deficit spooks the bond market to a point where long-term interest and mortgage rates move up very sharply," said Greenspan. "When that happens, that will cause the double dip."

Had to correct Greenspan.

[Bossobass]

I posted on this subject 3 months ago, in part:


Personally, I'm looking at the 30 year bond. But, not yet.

I believe all signs point to double digit interest on long term treasuries, by design. How else do you make a huge, guaranteed, unearned ROI in a depression?

Bosso

The bansters scam trillions from the Treasury (loans, bailout handouts, MBS purchases, guarantees, etc.) and park it at the Fed.

The big treasuries buyers buy mostly short term treasuries, giving them the power to manipulate the interest rates up by ceasing purchases/dumping them.

This is explained as buyers being "spooked" due to doubt about the US gov't's ability to repay the gargantuan debt caused by stimulus and welfare spending.

Rates rise sharply.

The federal gov't initiates an emergency plan of "austerity" and "record tax increases".

The stolen trillions parked at the Fed go to long term bonds at double-digit interest rates.

With the federal budget slashed, the new windfall of income from A to Z taxation flows from hard working citizens (earned income) to the bond holders (unearned income), bypassing Treasury altogether.

These bastards don't care if there's 30% unemployment. They'll be focussed on the 70% who are still working (who will now be working for them, indirectly).

There will be 24 hour a day news buzzing about the huge increase in taxes on the rich, but no one will look closely enough to see that the rich will still have their thousands of pages of tax dodges in the tax code.

I believe this was the plan all along.

Bosso

[DFF]

Well thought out theory, Bosso.

[Zippyjuan]

Minor technicality but it was FORMER Fed Chairman Greenspan who made the comments, not the current Fed. Bernanke will keep rates low as long as he can but Greenspan is right- the debt needs to be addressed. Our country's more prosperous times have occured when the government occupied a smaller portion of the GNP of the country.

[Pauls' Revere]

I posted on this subject 3 months ago, in part:



The bansters scam trillions from the Treasury (loans, bailout handouts, MBS purchases, guarantees, etc.) and park it at the Fed.

The big treasuries buyers buy mostly short term treasuries, giving them the power to manipulate the interest rates up by ceasing purchases/dumping them.

This is explained as buyers being "spooked" due to doubt about the US gov't's ability to repay the gargantuan debt caused by stimulus and welfare spending.

Rates rise sharply.

The federal gov't initiates an emergency plan of "austerity" and "record tax increases".

The stolen trillions parked at the Fed go to long term bonds at double-digit interest rates.

With the federal budget slashed, the new windfall of income from A to Z taxation flows from hard working citizens (earned income) to the bond holders (unearned income), bypassing Treasury altogether.

These bastards don't care if there's 30% unemployment. They'll be focussed on the 70% who are still working (who will now be working for them, indirectly).

There will be 24 hour a day news buzzing about the huge increase in taxes on the rich, but no one will look closely enough to see that the rich will still have their thousands of pages of tax dodges in the tax code.

I believe this was the plan all along.

Bosso

Yes!, you were the one! Thanks for that I remembered it. Sorry I couldn't remember your thread title I salute you.