Thursday, March 22, 2012

Did "Quantitative Easing" Cause The Gas Price Spike?

Oh, you betcha.

While Obama and his minions of half-wits, dimwits, and nitwits are barnstorming the nation blaming oil speculators for the rise of gas prices, they fail to mention one little thing:  That is was the Fed's policy of continued "quantitative easing" - the Newspeak term for the nonstop printing of money - that deflated the value of the dollar and forced investor to find other commodities to sink their money into.

Like gold.  Or the yuan.  Or oil.

But the price on one thing is dropping - US bonds! Hey wait - that's a bad thing! prices, as measured by Treasury’s 10-year note, had fallen (which automatically causes interest rates to rise) for nine straight days.

The market was going for its 10th straight loss on Tuesday when suddenly the Fed said, “that’s enough,” and intervened by purchasing $1.97 billion of a variety of US Treasuries.
The Fed, undoubtedly, was getting a little nervous because over the last three decades interest rates on the 10-year note had never climbed for 10 straight days.
Yesterday, the 10-year note continued its Fed-induced rally.

But the graffiti is on the Great Wall: Investors — especially our biggest customer, the Chinese — are getting nervous about buying US debt

John Crudele is not optimistic:

What happens next? If the economy shows signs of improving — and it usually does during spring — then rates should climb even higher as the market fears there will be an increased demand for borrowed money.
And the Fed could lose control over interest rates and the markets.

The debate should be this: After all we’ve been through, is the US economy broken?
I think it is..

Did you ever see the Mad Max movies, where anarchistic warriors battle on deserted streets for the remaining stores of gasoline?

It's about to be real.  Welcome to Obamaland...

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