Thursday, August 18, 2011

Krugman Bait

NEW YORK (Reuters) - U.S. Treasury prices soared on Thursday and benchmark 10-year note yields fell below 2 percent for the first time as global economic fears sent investors scrambling for safe-haven government debt.

U.S. bond buying intensified after data showed that factory activity in the Mid-Atlantic region plummeted in August while sales of U.S. existing homes unexpectedly dropped in July.

He's really going to enjoy that.

Conservative economics have been predicting, over and over again, that bond prices would rise due to the "quantitative easing", that is the stimulus, due to the flood of money into the economy. Krugman refers to them as the "bond vigilantes". Contrary to the conservative economists, Krugman has been predicting lower and lower bond prices as investors move to buy up government debt as a safe place to put money.

Even with the ridiculous downgrade on US debt from AAA, the bond price keeps going lower and lower.

In case you weren't aware, the bond price is the price that the US government pays on money it borrows.. so it could be borrowing billions of dollars at less than 2 percent interest and spending it.. on.. anything.. just dropping bucketfuls of cash on American cities would work.. it would boost demand for products, and unemployment would fall.. and government revenues would go up thus reducing the debt.

Instead, the Worst President in the History of the World is concerned about reducing debt and cutting social programs that benefit the elderly and poor.

Shit is so fucked up, it's hard to believe.. but the great thing is.. Obama is going to lose the election and things will get even more fucked up, and we'll (and by "we", I refer to people with means) will be relatively better off.

I think we have a good 6 months before the market hits the floor, and then I'll buy back in. I had written a scathing letter to my broker last month before the market started to tank, explaining most of this to him.. he sent me back a reply disagreeing with me.. of course.. because he just wants people to keep making trades that he gets commissions from. I feel like replying and just LOL'ing at him with a link to the latest news.

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