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There’s small choice in rotten apples
Treasury cash equity disappeared a long time ago. The Fed can print all the funny money dollars it needs, but higher gold and interest rate prices make that a bogus option unless they truly want to go down with the ship on their watch.
The 9% collapse in the continuous CPI, 12% collapse in continuous M-3, 15% collapse in continuous GDP and 21% continuous unemployment suggest either the Fed has taken it’s foot off the gas pedal, or more likely, traditional institutional credit and money multipliers have collapsed and even imploded. It now takes $4 of additional debt to create an additional dollar of GDP, and the markets are figuring this out.
Who is still borrowing?
Mostly only the banks and government still borrow, financed by the Fed with funny money, and the taxpayers with blood money. Personal income tax revenues, five times Corporate income taxes, fell almost in half.
http://www.shadowstats.com/alternate_data
Running on Empty
Government agencies and the Treasury are now all funded by government IOUs, the ultimate Ponzi scheme, when the government may run out of credit and taxes. Thus the attempts to tax anything in the world that lives, moves, owns or talks American.
Communities, foreign surplus nations, insurance companies, pensions and States holding the 30% remainder of Treasuries are doing the math:
Knowing the US must finance an additional $2 Trillion of Treasuries just to cover the budget deficit this fiscal year, and realizing that almost $5 Trillion of the Treasury Debt is funded by empty intergovernmental agency IOUs, the remaining 30% of US Treasury debt owners have been selling or not rolling over as Treasuries mature.
They have been selling into a falling Treasury market since December 2008, so the Fed has been buying up to half the newly issued Treasury debt, heralded by government monopoly media pieces announcing Treasury auctions as oversubscribed.
