The "Rules" Keep Changing
It is hard to predict anything with the way the rules keep changing. Something I have been very confused about is how the US government has been able to keep selling it debt.
Well, something I read in John Mauldin just cleared up that confusion:
Foreigners bought about $300 billion of the $1.5 trillion in new government debt. The rest came from the US, courtesy of the Fed buying mortgages. But that program stops (theoretically) at the end of March. The government still plans to run yet another $1.4-trillion-dollar deficit (give or take a few hundred billion). The question is, who will buy the debt? Foreigners will kick in another $300 billion, unless they decide to stop selling us stuff, or buy other less liquid or physical assets. So far there is no sign of that.
I have expected interest rates to rise, and in a free market they would have...
It was 3 years ago this month that I figure big, big, big trouble was coming. I don't think these measures will stop the "end game," rather they have just postponed it and probably made it a lot worse. What they have done is made it so those who live conservatively and invested conservatively now share huge risks. How can treasury bills be conservative when, well, it seems the entirety of market risk has been transferred to them? OK, not the entirety, but an enormous amount of market risk.
Tax payers weren't paying for existing programs before this garbage. It is nonsense to think this can be covered.