Wednesday, September 16, 2009

More Scary Financial Stuff

Go to this page and look at the left hand column under "Yield Curve US Treasury". The yield on 1, 3, and 6 month uS T-Bills is almost nil. The 2 year yield is below 1% again, which is close to the extreme lows of last winter. This is not good. This is not healthy. This is money pouring out of money market funds (which has a US govt guarantee set to expire) and into short term US govt debt. This is putting money in a spot where it is guaranteed to be the next day. This money does not make it into our financial system for lending to small and medium sized businesses that really need credit to operate. People are not deploying their savings or their invesments into longer dated areas.

Add to this gold popping up over $1000 and holding. I would add oil hanging above $70 when industrial output & trade have tanked from 07-08 levels. There's a weird situation out there now where psychos at a few trading desks are jacking the stock market up while other people are scared to death of any risk so they are throwing money into Gold, Oil, and US T-bills/bonds. Normal folks just want to know that the dollar they have today will be worth the same next year so they can plan their lives.

We have to fix the banks, not just lip service because stocks are up again. We have to break the the too big to fail banks up. We have to audit the Fed. We should cap the US Debt Limit. If not, the USA could end up in a currency crisis.

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