Very, very low %. I can only talk to a couple people about this issue, most people in my life would look at me with glossy eyes (in one ear and out the other) when I start to explain these problems…why care about US treasuries when there’s a new TikTok trend going around?
The deficit scaremongers don't understand money, debt or economics; they're 1-note Chicken Littles. We've been hearing them for 40 years and they haven't been right yet. They're a broken clock; they'll be right eventually but in meantime, oh my.
The permabull American Exceptionalists don't understand geopolitics, military strategy and foreign trade politics. They got lucky for a long time and thought that was "reality".
Then there's the "winners" of 40 years of financialization. Not the 1% but maybe the 20% or so. They were helicoptered to 2nd base by life's lottery and think they can hit in the major leagues. The top 1% or 0.1% have megaphones, by-lines, sinecures and professorships. We have to listen to them give us advice. They decry the Maga movement and everything Mr. Trump does, but they didn't lift a finger for 40 years when the other 80% got economically raped by the very system the 20% profited from. Well, learn to code right? But they didn't. That's for little people.
It's 0%.
It's all political economy, all the way down. I think it was Marx (not sure) who said the only effective force in history is violence. Our entire system is controlled violence, suppressed violence. Of course that's humanity in many respects.
So what is going on?
Lots of clashing, wrestling, looting and grifting mixed in with honest entreprenurialism and good people scattered everywhere -- even govt -- trying to do the right thing. Everybody is a puppet of something, some kind of myth, some sort of philosophy or rationalization.
We are nowhere close to the point where another cigar-chomping Paul Volker will show up but that's traditionally how the story ends. And despite the hardship the Volker tightening caused, the price levels didn't decline for long.
We have a simple system in the US. Most spending is covered by taxation. What exceeds that amount is paid for by volunteers who hand over their excess productivity (money) in exchange for a promise to get back a little more later. So long as the "little more" exceeds inflation, it's a decent deal. If inflation rises, so does the offered rate at the Treasury, discouraging more borrowing.
But when the Fed conjures money to buy notes (and presumedly to pay the associated coupons) it upsets that balance by eliminating any sort of control. The result is like a finger in the crumbling dike, hiding the symptom (higher rates) until it can't be hidden anymore.
Buy tangible, non-currency assets that throw off a bit of yield. Rental property is a good example.
How do they figure out how much of the auction was bought by the Fed? I thought it was kept deliberately opaque because if people know the Fed had to buy a lot it undermines confidence even more?
Foreigners promise big onshoring of business in Trump’s America while magically dumping our Treasuries to buy physical gold. We call that David Copperfield economics..
I wonder what % of the population has any idea of what's going on?
Very, very low %. I can only talk to a couple people about this issue, most people in my life would look at me with glossy eyes (in one ear and out the other) when I start to explain these problems…why care about US treasuries when there’s a new TikTok trend going around?
0%
I don't think there even is a "what".
The deficit scaremongers don't understand money, debt or economics; they're 1-note Chicken Littles. We've been hearing them for 40 years and they haven't been right yet. They're a broken clock; they'll be right eventually but in meantime, oh my.
The permabull American Exceptionalists don't understand geopolitics, military strategy and foreign trade politics. They got lucky for a long time and thought that was "reality".
Then there's the "winners" of 40 years of financialization. Not the 1% but maybe the 20% or so. They were helicoptered to 2nd base by life's lottery and think they can hit in the major leagues. The top 1% or 0.1% have megaphones, by-lines, sinecures and professorships. We have to listen to them give us advice. They decry the Maga movement and everything Mr. Trump does, but they didn't lift a finger for 40 years when the other 80% got economically raped by the very system the 20% profited from. Well, learn to code right? But they didn't. That's for little people.
It's 0%.
It's all political economy, all the way down. I think it was Marx (not sure) who said the only effective force in history is violence. Our entire system is controlled violence, suppressed violence. Of course that's humanity in many respects.
So what is going on?
Lots of clashing, wrestling, looting and grifting mixed in with honest entreprenurialism and good people scattered everywhere -- even govt -- trying to do the right thing. Everybody is a puppet of something, some kind of myth, some sort of philosophy or rationalization.
0%
We are nowhere close to the point where another cigar-chomping Paul Volker will show up but that's traditionally how the story ends. And despite the hardship the Volker tightening caused, the price levels didn't decline for long.
We have a simple system in the US. Most spending is covered by taxation. What exceeds that amount is paid for by volunteers who hand over their excess productivity (money) in exchange for a promise to get back a little more later. So long as the "little more" exceeds inflation, it's a decent deal. If inflation rises, so does the offered rate at the Treasury, discouraging more borrowing.
But when the Fed conjures money to buy notes (and presumedly to pay the associated coupons) it upsets that balance by eliminating any sort of control. The result is like a finger in the crumbling dike, hiding the symptom (higher rates) until it can't be hidden anymore.
Buy tangible, non-currency assets that throw off a bit of yield. Rental property is a good example.
How do they figure out how much of the auction was bought by the Fed? I thought it was kept deliberately opaque because if people know the Fed had to buy a lot it undermines confidence even more?
Foreigners promise big onshoring of business in Trump’s America while magically dumping our Treasuries to buy physical gold. We call that David Copperfield economics..
The story isn't that the 20-year is paying 5%. It's that cash is paying 4.3%. Why go out 20 years for a 0.7% bump?
Also, Jeffrey Carter had a great article on Wednesday's auction. It wasn't as bad as everyone's reporting.
https://jeffreycarter.substack.com/p/watch-the-bonds