In past reports I’ve covered the fact that the proximate cause of the US Treasury’s massive intervention in the Treasury market is the crash in Treasury bond prices and not yields. Dealers are underwater. They’re drowning. And surprise, surprise, they have engaged in more stupid behavior of the kind that causes systemic crashes.
Why are we surprised? These same Wall Street Mafiosi are behind every financial crash, and they are never held responsible. Quite the contrary, the Fed bails them out and rewards them for their disgusting, criminal malfeasance and wild gambling with other people’s money.
The financial system with the Fed as corrupt cop on the beat, stinks to high hell, but it is what it is. We just have to understand their corrupt rules and play by them in order to preserve and grow our capital. Understanding that game meant that we’ve had to be bullish most of the time for the past dozen years.
Sad.
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Meanwhile, hard working savers got robbed of the interest income they had expected to live on. Did the policy makers ever stop to think that if this income had been available for risk averse savers to spend on real goods and services, the economy would have done better, and risks would not have built to the point where they repeatedly threatened to destroy the system?
Ditto for insurers and pension funds. Had they been able to grow their assets through adequate, prudent income investments, rather than reaching for more risk, wouldn’t that have made the system less risky and fragile?
The thing about con games, is that they can’t last forever. The rot eventually infects the system to the point that it collapses.
We’re getting closer to that point. We see in a number of indicators signs that animal spirits are waning. The game has become too unstable. Players are leaving. They’re taking their chips of the table. High rolling whales are going bust. The casinos are pulling back credit lines, and demanding repayment. More and more players are being forced to pay up.
In short, money is disappearing almost as fast as the Fed can create it. We’re fast approaching a tipping point. This report illustrates.
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