US treasury bonds

[John Clark]

Normally when there is a stock market crash or any other sort of economic instability the interest rate on government bonds drops because people want a safe harbor for their money during times of trouble, but that didn't happen this time. The 10-year Treasury bond soared from just below 4% to  4.5%, the largest spike in a quarter century. Nobel Prize winning economist Simon Johnson explains why:

“What the market really didn’t like was the random crazy math of the tariffs. It seemed like they didn’t know what they were doing and didn’t care. It’s a whole new level of madness.”

Another  Nobel Prize winning economist, Paul Krugman, says: 

“Trump’s post-pause tariff regime remains the biggest trade shock in the U.S, and I think world history. If you were a business owner or executive, would you make any major investments or long-term commitments over the next few months? I wouldn’t.”

Former U.S. Treasury Secretary Janet Yellen says:

“This is the worst self-inflicted wound that I have ever seen in an administration impose on a well-functioning economy.”

When everybody wants to sell their bonds it forces the government to increase its interest rates for new bonds to get people to buy them, and that pushes interest rates up on everything else such as mortgages, car loans and credit card balances.  That's not all, normally an increase in tariffs would result in an increase in the dollar's value relative to other currencies, but this time it went down and for exactly the same reason, lack of confidence that Trump's economic policy makes any sense. And the markets are worried about something else too, China owns $761 billion worth of government bonds and it may decide to sell them in retaliation for Trump's imbecilic 145% tariff on Chinese goods. And that would make a bad situation much much worse.   

John K Clark    See what's on my new list at  Extropolis

dj5

 

[Cosmin Visan]

You don't understand what is happening. When an economy is doing well, it gives birth to anomalies such as the woke totalitarian regime where all the weirdos want to impose upon your children their own mental illnesses. What Trump is doing is to give people more pressing things to think about, like food on the table, and this way the weirdos will go away from public consciousness, and this way the children will be saved and the traditional family reinstated.