Brace For Impact: In 2010, Demand For US Fixed Income Has To Increase Elevenfold... Or Else

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Fri, 12/25/2009 - 18:48 | 174467 bugs_
bugs_'s picture

Well done.  Would it not make more sense

to mandate a percentage of IRA and 401k

be invested in treasuries for safety?  What

is a good estimate for the total of individual

ira, roth ira, sep ira, 403(b), and 401(k)

accounts?  Perhaps they'd only need to

mandate 5% to acheive the 2.2b.  Next

year they could kick it up to 12% to keep

the ponzi going.


Once they begin - people will have an

even bigger incentive to pull the accounts

so they will have to substantially raise the

penalties for doing so.  Expect it and


Fri, 12/25/2009 - 19:11 | 174483 Rusty_Shackleford
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Review Argentina's approach to said problem...



                            over, man.

Sat, 12/26/2009 - 07:57 | 174812 Hephasteus
Hephasteus's picture

I guess it's time to extract the lessons from it all. There is not working compounding interest money system. It all ends like this. But it works like a champ and makes a few people rich in the mean time. Now it's time to let it go or for them to try to stick us to a we'ere always broke but interest is low there's no fixed income for everyone just a few but people take all their money out of the banks and buy gold which doesn't get inflated but doesn't earn interest. But since our banks won't pay interest for the rest of eternity why not.

Tue, 12/29/2009 - 12:40 | 176763 arkady
arkady's picture

I do not understand some of the technical jargon in the article, but get the gist. 

My two main questions are and if anyone can field them, I will be grateful.


What is happening to Treasuries in 2010?  Bond market has always been a big mystery to me, but I am unclear as to the significance of the charts for 2010/2011.


If the Fed chooses scenario 2 and raises rates.  How will that result in runaway inflation exactly?  Other than speed up the already collapsing real estate market it will also usher in defaults for all equity lines, credit cards, etc.  This sounds more like significant deflation...

Mon, 01/04/2010 - 20:58 | 182545 FLETCH
FLETCH's picture

waterfalls of liquidity as everyone dumps their bonds and the Fed is out of ammo to absorb. money supply goes nuts, consumers buy out of fear



Tue, 01/26/2010 - 00:36 | 206130 Anonymous
Anonymous's picture

You nailed it buddy. That's the game plan.

Fri, 12/25/2009 - 20:01 | 174520 deadhead
deadhead's picture

Both Obama and Geithner some time ago were spewing words about the USA consumer needing to save more.  All I could think of was that they are setting the stage to drive consumer money into Treasuries.  It could end up being like the war bond approach to WW2 all over again.

I have a personal alert for Messrs. Geithner and Bernanke:  I came across two US Savings bonds for one of my kids that he received when he was born 19 yrs ago and have decided to cash them in for next semester's money needs.  It's going to end up being around $150 bucks and I do hope that it won't hurt the country too badly.  Please don't blame me if this redemption is the final straw on that poor camel's back.

Sun, 12/27/2009 - 21:40 | 175643 Cognitive Dissonance
Cognitive Dissonance's picture

You, my dear deadhead, will be the straw that breaks the camel's back. At least we will know who to blame for the resulting crash. Time to go underground before the angry hoards of undead are unleashed by the main stream media to string you up from your front porch. :>)

Fri, 12/25/2009 - 22:08 | 174613 wackyquacker
wackyquacker's picture

ding ding ding ding ding ding ding ding!

Sat, 12/26/2009 - 16:36 | 175011 Anonymous
Anonymous's picture

Great idea from a bankster! Your bankster games turned everyone's 401s into 201 and now you want the rest! To the guillotines! To the guillotines!

Sun, 12/27/2009 - 00:47 | 175239 Rusty Shorts
Rusty Shorts's picture


Mon, 12/28/2009 - 11:44 | 175936 curbyourrisk
curbyourrisk's picture

That is plan B.  A very viable alternative.  It will be doen, and it will be done to protect the people, and for the good of the people.


Sit people.....Good people...

Fri, 12/25/2009 - 18:50 | 174468 Cursive
Cursive's picture

Elevenfold, huh?  Interesting that you referenced the Sprott Hypothesis.  QE I is to sunset in March 2010, but we may have a shadow QE going on, via QuEasyGate.

Fri, 12/25/2009 - 19:09 | 174482 Zina
Zina's picture

Yeah, QE I is to sunset in March 2010, but the "Household Sector" (freemansory? extraterrestrials?) will continue to buy all issued debt. There is no way the US Government can default on its debt. Everything is gonna be alright. No woman no cry.


Fri, 12/25/2009 - 19:35 | 174498 Zina
Zina's picture

By the way, I have a suggestion for the tea party crowd: abolish ALL the taxes and substitute it by the Household Sector (aka the printing presses).

So the US may fund all its wars in the Middle East AND have a completely free healthcare system without collecting any taxes! The great Household Sector can easily fill all the budget needs.

Why nobody thought of this before?


Sat, 12/26/2009 - 11:26 | 174865 Andrei Vyshinsky
Andrei Vyshinsky's picture

"...but the "Household Sector" (freemansory? extraterrestrials?)..."

You forgot antinomians, and what's more you know better. Shame. :-)

Fri, 12/25/2009 - 19:01 | 174477 MsCreant
MsCreant's picture

Option three. We are all socialists now. The government will own the collapsed stock market too via bailouts.

Sat, 12/26/2009 - 00:00 | 174690 Bob
Bob's picture

The dumbest socialists in history, then.  By far. 

Sat, 12/26/2009 - 00:45 | 174717 Seer
Seer's picture

Who else is left, but the government, to buy a failed system?

Sat, 12/26/2009 - 19:25 | 175108 Anonymous
Anonymous's picture

the government, to buy a failed system... with WHAT?? There ain't no there there...........

Wed, 02/02/2011 - 13:19 | 927828 web dizajn
web dizajn's picture

who else but a socialist government, to buy a failed system? izrada web stranica

Fri, 12/25/2009 - 19:05 | 174480 SayTabserb
SayTabserb's picture

So, they've actually done it, at last. Congress, the Oval Office, the Fed - they've gone over the Event Horizon. You have to be right, Tyler. No way around it. You can feel it. 2009 was the one year they could get away with it. I read a post on HuffPo not so long ago where Dean Baker, arguing for more govt spending as the answer, complained about "deficit idiocy." You know, taking the deficit seriously. Krugman today talked about "fiscal scolds." The idea being: after all, as a percentage of GDP (that magical phrase used as an elixir to excuse the natl debt, however humongous), is not so great. But: they forget about its ABSOLUTE size, and this (ahem) also matters. Because we need foreign help (and the "Household!" too) to deal with it, and it's so frigging huge, there just isn't enough dough in those other, teensy GDPs to spare. I think the Blithe Keynesians may have forgotten that little nugget. One question: if they melt the market down, will they ligquefy enough? Or will they still have to use Phantoms?

Fri, 12/25/2009 - 23:56 | 174687 Bob
Bob's picture

That was interesting:

Our colleague Rob Arnott, who always does terrific research, wrote in his recent report that "at all levels, federal, state, local and GSEs, the total public debt is now at 141% of GDP. That puts the United States in some elite company--only Japan, Lebanon and Zimbabwe are higher. That's only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557% of GDP. Less than three years ago our total indebtedness crossed 500% of GDP for the first time."

Sat, 12/26/2009 - 13:14 | 174915 Anonymous
Anonymous's picture

Can some one enlighten me, who are the creditors for this 575% debt to GDP? And if they are not aliens why worry.

Sat, 12/26/2009 - 18:11 | 175071 Anonymous
Anonymous's picture

Creditors are fractional reserve conjurers whose principal AND interest can never be repaid without hyperinflation.

Create something for nothing and set the payment due and terms a long way off and you really can hoist yourself by your own petard.

An economic version of Stone Soup, but the Newish central bankers don't even provide the fire or the kettle.

They provide the worship of money, a golden calf, and a lotta confidence.

Fri, 12/25/2009 - 19:19 | 174487 waterdog
waterdog's picture

What could they do to engineer a stock market crash and not be choosing option #2?

Didn't blind growth get us here?


Fri, 12/25/2009 - 19:24 | 174490 Rusty_Shackleford
Rusty_Shackleford's picture


Riddle me this Z-men (and ladies):

When calulating an individual person's financial risk and viability, we look at his debt to income level (DTI), but when talking about a country we always look at debt to GDP.

However, is this valid?

Every dollar said government borrows and spends makes the GDP go up.

This is akin to looking at an individual person and counting everything he has purchased with his credit cards as "income".



(Also, the GDP is not the Government's income.  It is ours.

As soon as the government starts creating something of value and selling it at a profit, it can count it as it's income.)


Fri, 12/25/2009 - 19:57 | 174516 Shameful
Shameful's picture

I like where you are going with that but consider this angle, that we are their property.  Why can the government enslave us via the draft, because we are their property.  Why can the government take our property and earnings without our permission, because we are their property.  Why can the government pursue our income and property across the globe, be cause we are their property.  Slavery still exists in the US.  They got rid of private slavery and kept only public slavery.  Every American is a slave to the Federal Government.  They are free to take our fortunes and indeed our lives at their pleasure.  The only thing holding them back is the armed segment of the population, after all it's harder to rob an armed man.

Fri, 12/25/2009 - 21:38 | 174599 skippy
skippy's picture

Shameful, with all due respect, the arms you speak of give a false sense of security.

Firstly the thief must be with in range DC/WS can be a long way, away and does your ammo have the ability to penetrate their armor. 

Secondly, in a war between facts and the *truth* the frame is cognitive not material, have you ever tried putting a hole in a thought with a bullet. Your enemy's are many, can your clip dispatch them all before the need to reload arrives?

Lastly, if any one actually uses violence *especially with ballistics* you will only further their grip of power over you and yours as it will be used to enact stronger reaction on their part. My thought is to de-legitimize their power by not participating in the voting process, take the mandate away or as voices of the people they must have sufficient backing to lay claim to such and with out the backing will be naked for all to see.

Fri, 12/25/2009 - 22:40 | 174630 Mad Max
Mad Max's picture

How did that work for Chinese students in 1989?  Hungarian uprising?  Prague spring?  Palestinians today?

Nonviolent resistance works, sometimes, when the oppressor isn't all that evil and isn't all that interested.  Gandhi succeeded because the British Empire was spent.  MLK because the US culture was changing and he was in the right place and time.

Now how do I emigrate to Norway?

Fri, 12/25/2009 - 23:47 | 174682 Anonymous
Anonymous's picture

Pick up a copy of Getting Out: Your Guide to Leaving America by Mark Ehrman.5

Sat, 12/26/2009 - 00:28 | 174705 Bob
Bob's picture

A simple work stoppage is all it would take in America, I think.  No need to  march, demonstrate, etc..  A uniquely convenient revolution.  Efficient, too. 

Hell, you could fully man your post in that revolution from home.  Sleep very late and dvr the media coverage if you like. 

Too bad there are too many cowards, scabs, sycophants and stooges to give even that "uprising" any traction. 

Sat, 12/26/2009 - 05:08 | 174791 Eternal Student
Eternal Student's picture

Heck, keep working. Just stop spending.

But it seems to me that we're heading that way right now, in both areas.

Sat, 12/26/2009 - 20:24 | 175148 DosZap
DosZap's picture


Brother, the majority of us have already been doing this,(at least those who are smart).

No one has a clue what to do, because as you know, their NEW programs are going to affect us in way's undreamt of.

Easily have stopped me from spending on a new vehicle, or any major appliances , needs thus far, since the new Admin.

But, again, this too is/has been pre planned, IMHO.

"Never fail to take advantage of a Crisis".

(Or create one).

Sun, 12/27/2009 - 22:04 | 175656 Neo-zero
Neo-zero's picture

I've hear an idea floated a few place's recently about jacking your exemptions to the max and depriving them of the free loan on your money.  Starve the beast!!!

Mon, 12/28/2009 - 21:08 | 176402 Anonymous
Anonymous's picture

It's a good start, but everything we purchase above-
ground feeds the beast(leech). Most companies pay taxes and all of their employees pay taxes too. Self-suffiency and boycott are our most powerful weapons. The democratic process is a total sham. Divide and conquer.


Sat, 12/26/2009 - 00:31 | 174711 Anonymous
Anonymous's picture

Your points are valid to the geopolitical, although, I would point out that our masters like the illusion of kindness as it helps with their global strategic endeavors ie: spinning the good fight propaganda.

In my humble opines they are all looking at the last enchilada and whom will feed upon it, just look at all the wizardry needed in the financial's to extend and pretend this construct of power and privilege over us.

To whit, if it can be shown, their avarice, to become naked in it and of it. We could then as people of many bolts of cloth come together and remove them diminish them with out resorting too a roll of the dice on direct confrontation.

Skippy...Ya don't want the farm treatment.

Sat, 12/26/2009 - 08:54 | 174819 narlah
narlah's picture

There is a ultimate weapon of choice - we stop supporting the system. It's called "Faith based system" for a reason. The moment 'fate' is gone - the system is down too.

Sat, 12/26/2009 - 12:40 | 174898 Anonymous
Anonymous's picture

Simply stop spending except on things that makes you more self sufficient (ie. gardening, beer brewing, etc.), and refuse to take on new debt with any bank. The cannot force you to go into debt, you make that choice yourself. Also, pay cash where possible. Banks get 1-3% of each purchase you make every time you use plastic. It's not much, but it helps. Do things that minimize your tax exposure, or trade in ways that minimize it. Buy things online that are tax free, or buy used off of sites like Craigslist and deal in cash. Stop supporting your destroyers.

Sat, 12/26/2009 - 19:39 | 175115 Rick64
Rick64's picture

Have to disagree, It will work everytime if enough people are behind it and willing to suffer for it. Ghandi succeeded because the british companies weren't making any money thus having an impact on britian, MLK didn't change things by himself their were several people,groups, and organizations. He tried to make the demonstrations non-violent and unite the people. Right place at the right time? Tell that to the people that were murdered and prosecuted.

Sat, 12/26/2009 - 19:53 | 175122 Seer
Seer's picture

It will work everytime if enough people are behind it and willing to suffer for it.

And that's how it HAS been working: enough people have supported this system as they suffer from it...

While the British were effectively run out of India, I've got to wonder, looking at their caste system, whether it really has turned out all that well.

But yes, it's about the people preceding governments.

Sat, 12/26/2009 - 02:29 | 174757 Shameful
Shameful's picture

You mistake that I would have any intentions of fighting any kind of armed conflict.  I have zero interest in that.  My statement is simply that by the fact that a person is armed that makes a looter think twice before robbing him.  While you are correct that the Overlords are Quite safe in Mordor on the Potomac (DC) however the Orcs (IRS, EPA, etc) are less likely to unleash their full depravity when there is a chance a slave might take a shot at them.  Ultimately the gov would of course win a crushing victory over any armed resistance, no doubt.  All it would take would be to shut of water/power/food in a city for a week and the masses will gladly accept the shackles once more. Much less the use of the wonderful tech toys they have developed to murder and suppress populations.  Full agreement that armed resistance is futile, I merely think that by being armed we mitigate some of the depravity, or at least slow it down.  Think Fleet in Being doctrine.

As to not voting, they don't care.  They don't care about you not playing the game because if you don't so what?  The only way to "win" is to leave.  Deprive the beast of your labor, and your productivity.  No to be a fatalist, but the oligarchs won.  At least here in America, it's all over but the crying.  Well unless the sheep wake up, but they have their CNN, MSNBC, and Faux News to tell them it's all Red/Blue teams fault.

Sat, 12/26/2009 - 11:15 | 174832 Bob
Bob's picture

IIRC, we already have had the lowest voting rate of any Western country for at least a generation, by far. 

I agree, the overlords couldn't care less.  In fact, it even serves their purposes, leaving only the most naive to continue fanatically rooting for the virtually indistinguishable candidates of this wonderful two party "democracy" to provide empty play-by-play analysis material for the media to trumpet.  It's like professional sports--you only need two teams to produce the Superbowl, and most people have no particular attachment to the teams on the field by the final game, but most of the population is nonetheless raptly tuned in on the Big Game day. 

Sat, 12/26/2009 - 16:05 | 174999 Anonymous
Anonymous's picture

Just dont support the system. Pay off or default on your debts, and don't use credit cards or incurr more debt. Use cash or barter for all transactions, preferably barter.

If even a minority of the population would do this, the system wouldn't last 6 months.

Mon, 12/28/2009 - 12:46 | 175985 Ripped Chunk
Ripped Chunk's picture

Good advice indeed!  The IRS hates barter. The old "valuation" issue.

If its ok for the banks to fuck with valuations I think its ok for us to do so as well.

Sun, 12/27/2009 - 16:00 | 175499 ConfederateH
ConfederateH's picture

Not voting simply makes it that much easier for them to steal the election.  All roads lead to secession and civil war.  The federal government is far too big to be manageable, far too bloated to be rescuable and far too poorly run to be worth the effort.

The states will be forced to secesseed one by one as the federal government implodes.  Look at the break up of the USSR for tips.

Fri, 01/01/2010 - 12:18 | 179829 Anonymous
Anonymous's picture

How do you know your vote even counts now? Its all electronic anyway, do you ever see when your ballot goes through the system that the number changes by how you voted? The whole system is a farce.

Sat, 12/26/2009 - 00:13 | 174700 Bob
Bob's picture

Can't argue against your premise altogether, but the financial slavery argument seems to give short shrift to the private sector slavery most people know oh so well.     

Sat, 12/26/2009 - 14:02 | 174936 zero-my-hero
zero-my-hero's picture

You are right, we are slaves to the government. I recently received a jury summons. I'm expected to be on call for an entire month to be available for jury duty. How am I to plan anything at work for that month? I like the idea of trial by a jury of one's peers, but the fact is it is not voluntary and feels like slavery. Why not make it voluntary? I'm sure there are many people who could use the money, or are retired and have the time and interest. I'll happily volunteer when I'm retired. Now I have to have a significant disruption to my work and scramble for child care (my current childcare coverage and the courts schedule do not overlap by just 30 minutes). Say what you will, it feels like slavery.

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