Tuesday, April 22, 2014

BUBBLE BONDS

 large image of an I savings bond, $100 denomination
For want of a better term we'll just call it encouragement.

That's the real purpose of lower interest rates--get things moving again as in borrowing and spending. In government parlance it's called tax and spend. They're both shards from the same cloth.

The recent stand-in-line response for Greek and Puerto Rico bonds should come to mind. Yield-starved investors and Wall Street Wolves lined up to get them, the former for the yield, the latter to dump at a profit.

No matter how they try to change it, this is still the same old Yin-Yang Avenue we've all been down before.  Where you see one, you know the other isn't far behind. It's like the line in the old Frank Sinatra tune:

"Love and marriage go together like a horse and carriage. And this I'll tell you, brother; you can't have one without the other."
http://fivethirtyeight.com/features/the-potential-bubble-the-federal-reserve-cares-most-about/

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