Monday, December 1, 2008

U.S. Treasury Yields Drop to Record Lows on Recession Concern

This totally flies in the face of all those who have been predicting rising interest rates because of the Fed's "printing of money."

The fact is, there is huge demand for Treasuries simply because actions taken by Treasury and the Fed have caused reserves to balloon by $600 billion. These are the funds being used to buy Treasuries.

U.S. not having to "raise rates to attract capital." A ridiculous statement that displays a monumental lack of understanding of monetary operations. Yet, you hear it stated all the time.

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