What fiscal stimulation? QE seems to be ineffective, and helicopter money is only being used in a limited way in the Eurozone only, in the TLTRO program. Gross would be right to take a break from bonds if real helicopter money was attempted on a large enough scale. But that isn't happening. This isn't investment advice, just my observations. I wonder about Bill Gross, sometimes.

Chris, is there any way to tell what percentage of gold demand is used for bank solvency requirements under Basel and what percentage of the market is applied to the derivatives markets as collateral? It was recently accepted as collateral but I would imagine that makes up a small, but growing segment of clearinghouse collateral.

Once in awhile someone like Alan Greenspan and others will try to throw a tantrum to get yields to briefly rise, but hungry buyers pluck those bonds up whenever someone sells out of fear, misplaced fear, IMO. That is just my opinion, and not investment advice.

The main reason treasury bonds do not react to market data is that they are in demand apart from usual demand. They are in massive demand as collateral and other specific financial reasons. They have a life of their own. That is unnerving. But it has been known for sometime.

There is some inflation in housing where there are high paying jobs. But that isn't all of America, Moon. But it is mostly those who are investing in assets that are bringing this money to the market and competing with regular working people. But you watch, there will be outlets for some, They can cut their cable, move in with relatives or friends, get a tiny house or sleep in the Google parking lot. If there are no outlets look for large groups of homeless congregating. No politician will last when that happens.

But there is no inflation. So, the QE is sterilized, meaning the money printed is just swapped for treasury bonds. So we head toward the negative. The problem is, QE is no longer effective, and helicopter money, using no swap of bonds, especially when given to all citizens equally, would cause a little bit of inflation, but not a whole lot. But the Fed is afraid to do that. Dealers make money on treasury bonds. But they would not make money on base money being sent to each person. So, how negative will we go with business as usual? I guess we will see, with Europe and especially Japan leading the way.

Bonds have a different use now, John. They are more for collateral than for yield. The issue is the stability of stocks, even the more stable ones, under pressure.

And real #HelicopterMoney should have nothing to do with credit as it should be in the form of a gift of base money to all the people equally. And it should not be repeated once off the negative. 2 percent #inflation is never reached, and really declining GDP and declining inflation along with new demand for #bonds sets the stage for deflation, not inflation. But libertarians don't fear #deflation because they think it was what caused the 1921 depression. But there never was a credit crisis in 1921. Real deflation is bad, very bad. So far growth is slow, perhaps that is what gold bugs have always wanted, but it gives rise to a demagogue running for president.

If there was unfettered bank lending, we would not be upset that the banks won't lend out their excess reserves. We are headed to negative interest rates and Europe is there. Not using real helicopter money as defined by Friedman and refined by Eric Lonergan is sheer madness itself.

So, Trader Dan, interesting article. All bonds are gaining in demand, based on Basel rules and clearinghouse demand for collateral. Negative will actually allow banks and counterparties to continue to have good collateral, without margin calls, etc. And then the governments get funded by negative bonds.

So, when Greenspan rebels, know it is his idea of pushing risk off banks that started this structured finance debacle. It is just going to the end of what was inevitable. Maybe you will find this interesting: www.talkmarkets.com/.../hoarding-the-new-gold-early-history-about-structured-finance

Certainly there has to be a weakness in this seemingly foolproof system. Could be lack of bonds as collateral, or maybe austerity of all things.