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To: tired&retired

The interest rates that Government pays has been heading to zero for some time—this is not an accident. The reason is that the Federal Reserve (not foreigners) buys most of our bonds these days. If they didn’t, we’d have a failed bond auction and interest rates would immediately skyrocket. Zero interest rates reduce the debt burden and mean the Government can borrow with near impunity. So, as long as the Fed can keep doing that without consequences, the charade will go on.

Ultimately, the consequence will be hyperinflation. While inflation for food is high, its not high for other things. In fact, oil prices pretty much flutuate between $75-$100 per barrel. We’ve had close to hyperinflation before (1979-80), but this time we will have it with zero interest rates, so the pain will be much greater.


18 posted on 11/11/2012 5:52:06 AM PST by rbg81
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To: rbg81

Agree with all your points in post #81.

It’s just a matter of the public realizing what we are discussing and reality will hit everyone hard.


69 posted on 11/11/2012 11:37:25 AM PST by tired&retired
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