E Everyone Said Treasury Bond Yields Would Go Up After QE Ended

This is what happens when you repeal laws like Glass-Steagall. The senate vote was 90 to 8. Yes, it was a bipartisan endorsement of economic oppression and permanent austerity for the average Joe. The globalists are winning as their master plan for bonds has been realized.

Look at the Eurozone, for an example. The powerful nations threaten weaker nations in the block with suspension of banking services if they reject austerity on the citizens. If they are submissive, the powerful nations instruct their investors to buy the bonds of the weaker hands. In the words of Cloris Leachman in High Anxiety: Disturbing!

And, no wonder banks don't want to lend to the average Joe in the housing market. Why take the risk with long rates so low when you don't have to! Austerity becomes written into the stone of economic reality. Oh, I know, banks have loosened up a little, but only because house prices are bubblicious again.

So, while it was not literally "everyone" who said yield on treasury bonds would go up after QE, the ones that did are a vast majority of pundits. There are some big hitters who have warned of that rising tide, and the main stream media embraced it. The public pretty much believes that. But it isn't happening. It can't happen, in my opinion.

Even if interest rates are raised at the short end, the Fed cannot control yields at the long end. Some, like Paul Craig Roberts have said that long bond prices are manipulated, and Roberts has shown other markets are manipulated openly, like the stock market.

But, in his analysis of bonds, there is no mention that I can find of the massive demand for the bonds that now exists. I would feel more comfortable in his analysis if Roberts took into account rising demand for the long bonds. Roberts is libertarian-like in some of his analysis although he was not for deregulation in the first place.

Certainly, libertarians I talk to cannot grasp the new demand for bonds which has changed everything. It doesn't fit their belief system. They are locked into the past, like dinosaurs of economic thought. 

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The implications of low rates on the world economy are worth looking into. Here are some articles I wrote that may be useful in a further study:

The Markets Are Shocked, and That Means Economies Are in Jeopardy

The Fed Scares Everyone About Treasuries from Time to Time. Is It a Scam?

Summers and Roubini Talk Negative Interest Rates, Sound Logic but Uncharted Waters

Fed Chicken and Egg Conundrum, Dimon Proves Will Rogers Right, Banks Are Broke

View single page >> |

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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Gary Anderson 5 years ago Author's comment

Author note: Even with banks artificially goosing yields based on the new auction lawsuit as reported by Bloomberg, yields on long bonds are low and actually should be LOWER.