E A Whole Lot Of Gold Hoarding Going On

But those markets are huge, and it becomes necessary to hoard bonds. Larry Summers fears a shortage of those bonds.

While not being a fan of Fox News, I report and you decide. Is this fiat system backed by treasury bonds as collateral in danger of breaking because of the new hoarding? Economists among us need to think about it at least.

Certainly, there is nothing self correcting in this system of hoarding bonds to feed the derivatives markets' need for collateral. Long bonds' interest rates stay low even in boom times. That is a huge distortion that would not take place without bond hoarding.

There certainly is bond hoarding in the Eurozone. Nobody sells, they just buy. Negative interest rates seem to be a result. Bloomberg weighed in on this hoarding as well.

Perhaps only some shenanigans have kept bonds in the US from going negative. These shenanigans mean well, I suppose, because hoarding is not wanted. It distorts everything.

So, if you wanted an answer as to whether this fiat system is at the breaking point, I suppose you have to see just how low in yield can we go before the society implodes. I don't have an answer, but economists are screaming for a cashless society because they know where this hoarding is headed.

Keynes said gold is a "barbarous relic". Now the economists say cash is a "barbarous relic". And this is said because of hoarding and the need to force people to keep their money in the bank.

I say, stop the bond hoarding before somebody gets hurt. That seems to be just common sense. Use something else in the derivatives markets or we will face a very dangerous world going forward and something could break. For now, long seems to make sense when investing in bonds. Watch for limitations on bonds as collateral limitations on the hoarding of bonds, for that strategy to fail.

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Disclosure: I am not an investment counselor nor am I an attorney so my views are not to be considered investment advice.

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