Panic at the Fed!
The first increase in the discount rate (money the fed lends to banks) since early 2006.
Why?
Why with unemployment hovering at 20%, Home prices still spiraling down, and home equity evaporating faster than then the sweat it took to build that equity in the first place. The economy is on life support and the truth of it is that a hike in the interest rate is the kiss of death.
Did the Fed just go Kevorkian on the country? You won't hear this from Main Stream Media, nope not a chance.
Ten days hence, US Treasury tried to auction off $25 billion bucks in ten year notes and $16 billion in 30 year bonds. What happened? The usual suspects, foreign governments and investors, slapped 'em down. Bought 35% LESS long term notes than normal and prices went down like the Titanic.
They basically said, get your house in order or else. STOP spending like it rains money, STOP printing money like it's Charmin and for God's sake STOP borrowing like you can pay it back with the Monopoly money your printing up now.
That is why Bernanke raised the rate. The Fed is in an ass and elbows panic and the world sees this as a duck and run maneuver by the US Government. I full view of the Great Depression II.
Can you say inflation???
We'll be watching this one for sure.
Thanks to: Martin D. Weiss from which I have paraphrase much of this.
No comments:
Post a Comment
waddaya think?