What will happen in the economy if 10 year treasury yields hit 5.3% like in 2003?

[Pricechange]

I think the reason this thread is so active and well contributed to right now is that we, having been trading long enough to see, know the Fed will burn everything down in the name of banks and I guess the stock markets (if they can). But they will burn it all down. And we are here, interested in how they will burn it down and when. Allowing the US dollar to burn will hasten this by leaps and bounds. But, they probably will try to convert us over to a "completely controlled" digital currency. At that time I will be living in another country and using another currency. They really didnt see bitcoin coming. It came from japan because Japan is well further down this road. The posts in this thread about Japan are SPOT ON.

 

[KINGOFSHORTS]

Looks like the FED needs to do more so the the yields can drop to sub 1%.

 

[piezoe]

They've "managed" the inflation numbers pretty well (nice touch including an inflation chart from The Fed) - which is their specialty. Inflation itself is a whole other story.

But yes to clear things up a bit I would like to get rid of The Fed which many are against. Of which I would think that includes 99.9% of Wall Street - as long as each succeeding Fed Head follows the Greenspan "Doctrine" - when all else fails ......... print. The Street loves Helicopter Money.

The Fed is an essential part of money management, banking regulation, transaction clearing, international commerce, foreign exchange, and many other functions. A Nation can not function without a Central Bank anymore than it can without a Treasury. Without either one of these critical agencies -- they are really one agency made to look like two to protect monetary policy from too much political tampering -- you do not have a modern nation; you are back in the 19th century, with one banking panic after another, and people lugging sacks of gold around. .

 

[athlonmank8]

5.3 will be Armageddon. Doubt we will see it.

Not only that, but how can these municipalities afford the increasing interest rates with the deficits they're seeing and will probably continue to see? What did the budget for? I'm clearly missing the long term picture, because this is headed down a scary path if we don't start fixing our finances.

2.2% on the 5 year is going to be bloody from what i've been reading.

Yep, this. DISASTER. But how can it be stopped indefinitely? If they keep printing money at a 23% annual clip everyone is going to finally realize that inflation is coming HARD and won't want to touch bonds. If nobody is buying, how to they prevent the yield from going up? I know the Fed can keep buy, but eventually THAT has to stop or else we will be in hyper-inflation territory.

This has everyone scratching their heads. They will be the last to scream fire since they have so much skin in the game.

TARP was the Troubled Asset Relief Program. The government bought troubled assets which it then liquidated over time. It was profitable to the U.S. government to the tune of tens of billions of dollars. How, exactly, did that put us on this road to doom you seem so certain about, despite, it seems, not actually even knowing anything about the programs you're so sure set us on this road to doom?

True

 

[SunTrader]

The Fed is an essential part of money management, banking regulation, transaction clearing, international commerce, foreign exchange, and many other functions. A Nation can not function without a Central Bank anymore than it can without a Treasury. Without either one of these critical agencies -- they are really one agency made to look like two to protect monetary policy from too much political tampering -- you do not have a modern nation; you are back in the 19th century, with one banking panic after another, and people lugging sacks of gold around..

You got a good imagination and mean well I know but reality is different.

 

[Sig]

You got a good imagination and mean well I know but reality is different.

So the Fed doesn't do anything in transaction clearing? That whole fedwire thing that's literally responsible for every wire in the U.S. is a figment of our friend @piezoe's imagination?

I'm trying to figure out if you once applied for a job at the Fed and got rejected so you're bitter, or if you really don't understand what the Fed does?

 

[piezoe]

You got a good imagination and mean well I know but reality is different.

Here is something we should all think about and be grateful for. Because day to day banking transactions are processed through bank reserve accounts by the Fed, you do not need to have the slightest concern about the solvency of the bank you write a check on. So long as you have deposited funds to cover your check it will ALWAYS clear regardless of the solvency of your bank. That wasn't always the case before we had a federal reserve banking system. How much is it worth to you not to have to be concerned whether your own bank is well run and solvent. It doesn't matter. Your checks will always clear and your deposits will always be secure, because of the Fed system and FDIC! *

*Tid bit of useless knowledge-- check clearing used to be handled , at night!, in the basement of the Dallas Fed Branch, maybe it still is, electronically of course.