Or If You Prefer: No More Food For The Dogs

clipped from www.financialsense.com They say a picture paints a thousand words. Well this picture paints very clearly the American Economy for the last 30 years. Ever decreasing Bond Yields which = EVER EXPANDING DEBT. The chart below shows that interest rates have been decreasing by approximately 0.5% every 2 years. Put simply, As the price of debt becomes cheaper more is created and then spent, and that effectively is the economy. That is until the market runs ahead of itself and then crashes WHICH HAS NOW HAPPENED, or until you reach the ZERO BOUND position of 0% interest rates WHICH HAS NOW ALSO HAPPENED. The economy is 70% based on the consumer, and the consumer has been trained over the last 30 years, just like Pavlov dogs to expect ever decreasing interest rates and attendant increasing property prices. However the Fed have a problem they have no more food for the dogs, as they are now at 0%. The Consumer is tapped out, so now the Government has taken over the perpetual debt machine