Here’s a relevant joke:
Two friends are camping in a savanna. They see a lion running toward them, and one of the men responds by sitting down to lace on his running shoes.
His friend exclaims, “Are you crazy? You’ll never outrun the lion!”
To which the first man replies, “I don’t have to outrun the lion, I only have to outrun you.”
My theory is the US government is doing exactly that. They are stimulating new demand for the debt. They have to because normal demand comes from rational people.
One of the ways I believe they stimulated demand was by forcing banks to hold a certain percentage of their reserves in US Treasuries. The official argument is that it would prevent banks from taking too much risk. This sounds good on the surface, but like most things doesn’t fit with removing reserve requirements for banks to loan during COVID. I would think at the start of COVID when the economy was shutting down that making sure banks could loan without reserves wouldn’t be a big problem since there would be very little demand for loans during lockdowns. Then I remembered the PPP give away. loans.
Debt backing debt.
I think to stimulate further demand for US Treasuries they will require that 401K/IRAs hold a certain percentage of US bonds. It doesn’t matter that it is your money, it is not your choice.
I don’t know how they will sell this, but it doesn’t take much when you have people that will just lie to you like the clowns that spout off about debt not being a problem because it is a debt owed to ourselves.
Maybe they will then force people back their land or property with US bonds. If you own a quarter of farm ground, you need to have 25% of its value in US bonds to keep you safe.
This way they can keep a baseline demand and the Fed only has to make massive purchases here and there to keep the perpetual motion machine spinning.
It is like a US Senator (I think Alan Simpson, but could be wrong) said about Social Security. He said something like “I guarantee Social Security will be paid. It will just be in dollars not worth anything.” The same holds true for the bonds. Whether you realize it or not, they reduced the value of the dollars to pay off those bonds by 40% in just a couple years. 30 trillion in BidenBucks is the new 20 trillion in before times funny money.
For the privilege of lending money to the federal government, the interest a bond holder receives is taxed as ordinary income. Insult to injury to insult
Not to kept proles out of nice areas.
Can’t make this up. As John would say: “Well, of course. What could possibly go wrong?”
Sign of Bidenflation:
America is no longer a viable country.
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Chicago has suffered so many murders from gun violence that the city is now offering to pay out $1,500 in funeral costs to help bereaved families.