On Tuesday, Treasury suffered its worst five-year auction in history. Yet that news barely made a headline.
It’s not the first time Treasury has struggled to sell its paper...and they're certainly not alone. The Germans – among several other Euro-zone credits – have struggled to auction their debt since last October with four failed or reduced bond auctions (even the Chinese endured a failed bond auction this July).
That’s almost mind-boggling...especially since I’d consider the Germans the best government credit in the world, possibly along with the Swiss and Norwegians.
The United States, like several other European governments, is struggling to sell a truckload of Treasury’s this year. Investors are advised that this slow bleed can easily magnify into a full-blown crisis over the next few years if the global economy fails to recover.
But government debt has enjoyed a great run for the last thirty years...
The 28-Year Bull Market
From 1981-82 until December 2008 Treasury bonds enjoyed a secular bull market as interest rates collapsed from a Volcker Fed peak of 20% in 1981 to 2.25% in December of last year. Zero-coupon bonds – long-term bonds on steroids – have earned big double-digit gains over the last 28 years as rates tumbled, handily outpacing most global stock markets.
But the big bond bull market is over.
Link
I think it fascinating that for many years we have printed useless paper and traded it with the Chinese and others for actual goods.
ReplyDeleteGive me a computer, TV, printer, stereo ... and here are these pieces of paper for you!! I can print more if you like!
Strongly disagree with the above statement: "Give me a computer, TV, printer, stereo"
ReplyDeleteDefective, yet cheap, manufactured Chinese items present a strategic attack on the US Economy: 1) substandard parts and slave labor destroy US competitors, and 2) defective tools, electronic gear etc drive up replacement costs and negatively affects productivity. The Chinese have been known to install trojans, including listening devices/software and geolocators, in some electronic items (routers, SW Radios), knowing certain number will end up in sensitive areas, like military bases and corporate R&D labs. So far, the "peaceful invasion" strategy has paid off.
What to do:
1) Consider "Made In China" a warning label. BOYCOTT CHINA!
2) Don't stand in line for a job. Create one for yourself that creates a commodity, or provides a critical service (repair business, micro-brewer, ammunition reloader)
3) Invest in things you can use and trade, and not in paper. Recommended: ammunition, gun parts, fuel, fertilizer. Avoid coins, jewelry, anything that needs batteries, or "Made In China"
Semper Fi
It was a statement of fact regarding how we do not produce. Not a pro-China statement. If you had a copy machine and could print 'gimme' on slips of paper and trade them for gun parts and ammo would you? Of course. That is essentially what we do as a country. We are the parasites. They may make substandard junk but at least they make something. We make paper.
ReplyDeleteOur owners craftfully sabotaged our ability to compete on a production scale where now we are a service based economy full of mall shoppers mixed in with lofty goals of remaining the world's conquering empire.
Deception, lies, house of cards. When, not if, the house gets kicked over is the question.
Semper Finance. Fight and die for Zionist Bankers.
ReplyDelete