Good God, CNBS Has Sunk To A New Low


Jim Grant is trying to talk sense and the idiocy on display within that set is just beyond the pale.

Economies, in the large view, are a balance sheet.

If you “lower” interest rates then while the person who wants to borrow gets a benefit the person who lends gets exactly the same amount less in interest.

There is no nebulous source of this “benefit.”  It comes straight out of someone’s hide.  That someone is probably you, if you’re a middle-class or below person, because the middle-class is dependent on forced savings for retirement and other programs that all, due to their design, use Treasuries and Agency debt — and its cash flow — as their primary means of funding.

I am speaking of Social SecurityMedicare and Pensions.

The rich don’t give a damn about any of those three.  The poor and middle class not only care about them they are dependent on them as they age.

What do you think the $4.9 trillion in so-called “Intragovernmental Holdings” in this table are?

Current Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
12/13/2013 12,311,985,340,603.71 4,912,143,859,577.13 17,224,129,200,180.84

Those are Treasuries — the very same Treasuries that Bernanke is suppressing the interest rate on!

The rest (Debt Held by the Public) along with “agency” securities (mortgages, primarily)?  Guess who holds that too?  All sorts of entities, including insurance companies and pension funds that have a need to match duration of investment with expected duration of payouts.

You, specifically, are personally harmed by this, and not just in retirement either.  You’re harmed by (among other things) higher insurance rates because every dollar an insurance company cannot gain through interest income it has to obtain by charging you a higher premium.

Wake up America — QE is not only a scam, it is theft and the people responsible for it along with those who cheerlead or support it in any form or fashion should all be in prison for the rest of their lives, breaking rocks until their heart explodes.

The Market Ticker

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