Courtesy of John Nyaradi
Hold on to your bippies! The Treasury sold $10 billion worth of five year Treasury Inflation Protected Securities at a negative yield. This means investors get back less money than they spent.
The government wonks blew this off saying that it’s the market’s way of betting that Bernanke & Co will be successful in preventing deflation and inducing inflation.
What a load of crap…what this really means is that the markets are scared stiff that the quantitative easing Helicopter Ben and his bunch are going to undertake will ignite 1970s style inflation when the genie gets out of the bottle.
So they’re willing to pay the government for the return of their money rather than a return on their money.
It’s absolutely the wrong course of action in a crisis that was caused by too much money in the first place. We saw this in Japan in the 1990s when the same thing happened and investors were paying the Japanese government to take their money which is what’s happened here. That nation is still in the toilet after 20 years.
Excessive monetary creation – aka printing money – has never worked, will never work and can only result in the mother of all bubbles. Not to mention another financial crisis. Enough is enough guys.
