The Fed OD’s on QE3 and bonds go down, the real crash is beginning

The Fed today announced it would print money until the economy recovers. Ergo, it will print money forever, because printing money prevents economic recovery.

Gold and silver went berzerk today. But bonds did not. They went down. You’d expect, after an announcement that the guys who print money are going to be buying bonds with it, that the value of bonds would go up. If a company is bought out by a bigger company, then the stock goes up, because said bigger company is buying a bunch of stock of the smaller company being bought out. This is what happens in normal markets.

Unless…unless nobody wants any of the shares of the smaller company to begin with and they all think the big company is insane to buy up the smaller company because all they sell is solar powered flashlights, so everyone sells all their shares to the bigger company and the stock actually goes down even though the big company is buying it up because EVERYONE ELSE is selling their shares to the bigger company too.

This is what happened today. The government is selling pieces of paper that promise to pay you dollars in the future. They are selling “stock” in dollars. But dollars in the future are worth a lot less than dollars in the present. Nobody wants dollars in the future. They’re like solar powered flashlights. So they’re all selling them to the fed. And bonds went down, even though the biggest buyer just stepped in and said we will buy bonds forever.

This is it folks. The real crash is starting right now. If bonds are going down today of all days, interest rates are on their way up That means the interest on the national debt is about to go through the roof. Every bailed out bank is going to fail. Again. And this time there won’t be any more bailouts.

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