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

Are Bernanke and Yellen Charlatans Dangling the Carrot of Prosperty?

As a footnote in closing, I would say that the system we are suffering with today could implode. There could be a revolution or nuclear war. or plague. There could be sane men who see the damage of derivatives, who could take the long bond out of consideration as collateral. There could be a plague. So, things could change.

While I don't know about God's immediate plans or first strike nuclear war scheming, it is not likely that purely economic factors will change this economic system for a very long time. Gold prices, for example, may stay in the doldrums longer than gold bugs' life spans, in this treasuries-as-the-new-gold twilight zone we are now in. Talk about an ill timed investment strategy! Peter Schiff and the libertarian bugs could all be history before gold makes a big move up.

One would think that with gold used as collateral we would see the driving up of the price, but it has been acting more like a commodity than collateral. Copper is used as collateral in China but there is so much of it that it does not act like collateral in demand, like treasuries act.

Is the gold market manipulated? Some say it is. Recently, gold has begun to be accepted in clearinghouses as collateral. It isn't money, any more than sovereign bonds are money (the bonds back fiat money), but it is collateral. The demand for gold as collateral may cause gold to go up in price, but the gold market is so large other factors could impact any move up.

We know that Japan has the lead in this JapanRUs race that all nations appear to be copying. So, perhaps we could gain a clue as to when or if this financial system implodes by watching Japan. It hasn't imploded yet. And it has been zombified for 20 years and appears to be coping as the Japanese Rogoffs and Stockmans cry silly warnings about government interest rates rising at the long end. 

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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.