Interest rates are the million dollar question...drives me nuts..is the economy to weak to support much more than 4% on the 10 year note? or will our govt "have" to raise the yield to be able to see our debt? anyone gotta crystal ball? and what time frame? I am starting to think the emerging market debt where companies dont have borrowed money much..they have to pay cash..is where bonds are more attractive than US bonds...geo pol risk of course...opinions?
A lot of cross currents out there, frankly i do not see any resolution that will be positive for investors, the economy in the longer term.
Bernanke has chosen the easy route of attempting to print our way out of this mess. Wall Street/Banks are the main beneficiary of this short-sighted and short-term fix, hence the reason they revere Ben, labeling him a genius.
I see it very differently, i am convinced time will prove Bernanke to be a fool of the highest order. One cannot resolve a previous bubble by engineering a larger one. Eventually it too will collapse with severe consequences for all.
Only the next crisis we will be sitting on unprecedented debt obligations, a collapsing currency with no possible cure other than a prolonged very painful cleansing process (much like Greece,Iceland) that i am not sure our society is willing or capable of enduring.
One must accept the fact this debacle has been three decades in the making born of greed, ludicrous monetary policy, failed regulatory bodies/rating agencies, and a truly corrupt banking system.
We should of used this most recent economic calamity to clean house, to break up our largest so-called banks, return them to the business of banking, not derivatives, speculation, securitizing loans, predatory lending, et cetera.
We missed the opportunity to overhaul the rating agencies, to enact true financial reform. But sadly it has become quite evident the few who created this charade and who have profited greatly at the expense of the majority are extremely powerful players in our Plutocracy.
They have proven to own our govt, treasury, fed, regulatory bodies, rating agencies. Difficult if not impossible to implement much needed change when your system is corrupt to the core.
An economy built on debt, various forms of quantitative easing, a fed balance sheet overflowing with $Trillions of toxic assets (courtesy of our largest financial institutions)is destined for failure.
The last time the Fed acted near this aggressively to prevent a recession was back in the early 70's, planting the seeds for a decade of painful stagflation. The big difference this go round, the fiscal house of this country was in much better shape back then.
Bernanke and our govt have hijacked the free market, distorting the pricing of risk, not allowing the failure of bankrupt institutions, intervening in the laws of supply & demand.
This will eventually lead to a toxic mix of hyper inflation in some asset classes such as dollar denominated commodities and yet a deflationary spiral in others like homes, hotels..
Any assets that are owned or tied to the well being of the majority of citizens will continue to collapse, following their plight into poverty. Rising food/energy, falling wages/unemployment a very ugly recipe.
We should of let this recession run it's course to cleanse the decades of abuse, the sins of the past. The powers that be chose to protect their interests instead and we will all pay a very high price.
"We should of used this most recent economic calamity to clean house, to break up our largest so-called banks, return them to the business of banking, not derivatives, speculation, securitizing loans, predatory lending, et cetera."
It was a golden opportunity to let the crooked banks go under along with $7T in debt they had on their books and their 30 to 1 leverage. And then clean house in the congress that let it happen.