Do you ever get the feeling the FED and the US Government...don't now what the hell there doing? That your tired of these massive bubbles...Dotcom,stockmarket,Housing and commercial real estate....not to mention this bubblemania is worldwide.
Now think about it....what is the last remaining asset...that hasn't been used and screwed...oil....housing....no there toast for now. The only thing left to pillage is the U.S. Treasury market....and if the Fed screws with the Full faith and Credit of your Country...well 1929 to 1938 will look like a Boom....
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Karl Denninger's take on the US Treasury Market
"Yesterday we closed at a historic low, and early indications today are even worse, at 21.20 The IRX, or yield on the 13 week T-Bill, is essentially zero.
One cannot argue one simple fact - Bernanke hasn't yet started buying the long end of the curve to any material degree. But he's been threatening, and today the FOMC statement made explicit what had been whispered before.
The mouth-breathers were all over CNBC and elsewhere yesterday and today claiming that this would "stabilize" the credit markets and make credit (and the economy) better, with the most outrageous displays of stupidity being put forth by Cramer and McCulley of PIM(p)CO.
Yeah, right."
"What happens when this bubble bursts?
You think it won't? Like hell it won't. And when it does - that is, when Mr. Market calls the bet and forces Bernanke to actually make good by starting to unload all these "accumulated" Treasuries into his gaping maw, we will see "shock and awe" of another sort.
See, if the selling starts rates go up. To stop that Ben has to take up the supply. This causes him to print more money (expand his balance sheet) which means that the full faith and credit he relies on is further damaged. That in turn causes more people to get the idea that they better sell now which in turn causes him to buy more which....."