The Federal Reserve announced a $1.2 trillion plan three months ago designed to push down mortgage rates and breathe life into the housing market.
But this and other big government spending programs are turning out to have the opposite effect. Rates for mortgages and U.S. Treasury debt are now marching higher as nervous bond investors fret about a resurgence of inflation.
That's the Catch-22 threatening to make an awful housing market potentially worse and keep the economy stuck in a funk. Kick-starting the economy requires higher spending, but rising rates mean fewer Americans will be able to refinance their home loans. And some potential buyers will be shut out of the market by higher monthly payments they won't be able to afford.
Every action the government will be defeated by some consequence about which the government and the MSM/DNC will not warn the public.
To understand how this is all connected, you have to think like a bond trader.
No, you need only think like someone whose livelihood does not depend on a government check.
Inflation is their enemy because it means the purchasing power of the dollars they receive when bonds eventually are paid off will be diminished. The only question is by how much.
That is only partially right. Inflation is everyone's enemy (except for those who want to wreck the economy to pave the way for dictatorship) because it will destroy savings and make it impossible for planning, economic calculations and hiring decisions. Without savings and long term planning, there will be no jobs and no production. If that thought has not sunk in, it will. Just wait until the stimulus money kicks in.
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