In reading my list of financial blogs this came up from Pragmatic Capitalism. If the simple charts below are correct and I have no doubt that it is, then by the numbers – Who the hell is going to be buying the Treasury Bonds after June? Somehow I agree that all this is a Ponzi scheme bigger than Madoff. It also has Train Wreck posted all over it. To continue to sell those bonds when the biggest buy goes away the return on the investment will surely have to jump way up. What does that mean? Maybe much higher interest rates? Maybe a substantial bounce in “visible” inflation. The invisible inflation we are facing now with higher commodity (food, fuel, clothing) prices. Maybe “we have seen the enemy and it is us”.
Who will buy Treasuries when the Fed doesn’t?”
