Good For Traders Too
The real news today isn’t that Europe is toast; geez, we’ve all known that for some time. Only the politicians think that with just one more conference they can
fool pretty much all of us find an answer to a non
computable problem. Who else would sit around and try to figure out how 2 + 2 =
22 and then with a straight face tell you it is true?
No, the real news is that interest rates around the world are flattening big time. Pick a maturity, it doesn’t make any difference; everything is approaching zero or below.
The ramifications of this are mind blowing. What the Central Planners are attempting, while everyone else flees to safety in Germany, Japan, and U.S. government paper, is forcing you out of cash and into just about anything else. The rationale here is simple: money that lies around getting interest just isn’t productive.
So, while the Cntrl-P button over at the Mariner Eccles building is on full speed ahead and the dollar is getting debased by the minute, as of today your after tax yield on 10 YR. U.S. Gobermint
paper is less than 1%. Break out the party hats; you can loan
spendaholic deadbeat politicians money for 10 years and get nothing back. Ten
years from now what is that money going to be worth?
That this is terribly destructive to those who are near or in retirement isn’t really a concern of the Hope & Change crowd. So, how do Ma & Pa Kettle, besides the Ponzi known as Social Security, earn a return on their life savings and work? Easy Peezee; they don’t.
Don’t worry, we have all kinds of Gobermint benefits for you folks; food stamps [oops, I mean nutritional assistance], section 8 retirement housing, heating & cooling bill help, supplemental Medicaid and/or Medicare, and the list could go on for pages.
Rights enumerated in our Constitution are God given; benefits dolled out by Government are given and taken by the whim of the political elite.
“Hey Grandma, you haven’t eaten your broccoli today! Get with the program or we may just have to cancel your Medicaid. You are undermining the future of your grandchildren by unnecessarily raising health care costs.”
Given the fact that, on the whole, the Amerikan public is dumber than a bag of carrots, this won’t dawn on the masses until their IRA’s and 401k’s are confiscated or forced to buy Gobermint paper. Even then, though, I’m betting more than half will care more about American Idol and college football than the fate of the country.
At every step of the way, government will do whatever is necessary to keep the masses soothed and stupid. That they are intentionally robbing people of their life savings and productivity, right in front of their eyes, should make you nervous.
You are nervous aren’t you?
Have a good day everyone.