We are also facing China’s economic difficulties, which I consider severe. I would be standing around and holding my breath. You can “dot plot” yourself all that you like, but when the Fed’s assets stand at almost $8.5 trillion, which have more than doubled since 2020, then the real effect of some sort of maybe-maybe taper will have all of the immediate effect of a candle flickering in the economic wind. “Build Back Better” may be a failing concept, but “Buy Bonds Because” is a program that the Fed decides upon, and it is also a program upon which no Representative or Senator votes for or against. If you think this is all suddenly and magically going to change anytime soon, then I invite you to think again. economy, in my opinion, by providing manna from heaven for the government’s borrowing costs and an incredible tax without legislation on the American people. That is just a shocking spread and the highest spread that I have found on record. I calculate this by averaging the CPI number and the PPI number, which places America’s overall inflation rate at 8.2%, or 675 basis points, over our 10-year Treasury. What is also incredibly interesting is the spread between America’s average interest rate and the 10-year Treasury. Perhaps it is because Omicron may translate into “taper later,” or perhaps it is because there is so much money in the system that it continues to flow into wherever it can find a decent home. You might think that with all of the talk of a “taper” in the Fed’s bond buying, interest rates would be heading higher, but with the 10-year Treasury at 1.45% this morning, that is clearly not the case. Maybe it will be “Hi-Ho Gold” or “Hi-Ho Bitcoin.” It depends upon the horse that he is riding, of course. This is, of course, when inflation is spiking through the capitol’s dome. Apparently, you have to be masked now when handing out money to the government, purchasing their securities, and holding rates at historically low levels. He lines up each week and doles out money in reverse repos and buys our government’s bonds. He is wearing his mask, of course, based upon the advice of the CDC.
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