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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: yoremopnhoj who wrote (108906)7/14/2010 4:30:33 PM
From: Elroy Jetson  Read Replies (1) of 110194
 
Yes. Banks are buying US Treasury bonds to fund government borrowing needs.

This also provides banks an interest income spread between these Treasury rates and the ultra-low short-term rates the Fed will continue to offer to banks for another six to eight years, while the banks amortize continuing loan losses on foreclosures and bankruptcies.

We're merely experiencing a standard issue economic depression.

There will be asset price deflation, NO price inflation, and occasional price deflation when this Fed lending machine cannot keep up with the rate of debt liquidation.
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