The stock market continues to hit new highs on a daily basis. The MSM continues to peddle the storyline that the economy is recovered, jobs are being created, housing is booming, and the future is so bright we need to wear shades. Our beloved politicians in Washington DC continue to spend $1 trillion more per year than they collect in taxes. This means the U.S. Treasury must issue $1 trillion of bonds per year. In a NORMAL functioning capitalistic economy, the market would determine the interest rates necessary to convince a buyer to buy the debt. The basic economic law of supply and demand taught by Princeton economics professors in Econ 101 would function to determine interest rates.
The chart below reveals how NORMAL our economy is today. Abbie Normal is more like it. In 2008, before the Wall Street bankers and their puppet Bernanke destroyed the worldwide financial system, the Federal Reserve purchased about 12% of all the Treasuries being issued. Today, the Federal Reserve purchases 90% to 95% of the $1 trillion of annual issuance. The Japanese don’t have surpluses anymore, so they can’t buy. The Chinese know they are getting screwed, so they’ve ceased purchases. The Federal Reserve has warped the bond markets by purchasing all of the Treasuries with newly printed fiat currency at artificially supressed rates.
If the economy was anywhere near normal, would this be happening?
If the Federal Reserve even slightly reduced their purchases, interest rates would soar. They will never stop, because they can’t. David Stockman pointed this out in his Op-Ed and the usual Ivy League asshole economists began spewing their academic crapola to create the illusion of normalcy. It’s nothing but bullshit and propaganda. Things will never be normal again. Ben Bernanke’s goal is to retire before the shit hits the fan, because it will be the biggest shit in history.