Monday, 1 August 2011

This Time IS Different

For months now, long before the end of QE2, we have been forecasting on www.eforum21.com as well as on repeated posts at the Gavyn Davies Blog, the advent of QE3 and the coming debacle of Bill Gross and those other pundits who said that QE3 would never happen and US treasury yields would spike the day after QE2 ended! (US 10-year notes were down to 2.6% yesterday!)
One of the things we forecast was also that, unlike what our indefatigable duo of Carmen Reinhart and consort have been preaching for a while, "this time really, truly, absolutely IS, IS, IS different"!
It seems that our "dynamic duo" are still fast at it: they are still (!) - despite repeated warnings from Joseph Belbruno - raving on about those "foreign investors", those "bond vigilantes" who control the destiny of the US government! What patent nonsense! As Belbruno has been screaming so loud you can hear him even in outer space (!), the fact is that all those foreign "bandits" who deposit their stolen capital (starting with the guillotine-worthy Chinese dictatorship, to the Russian mafia) in US treasuries - pray, what will they do if the US are "downgraded" and, thereby, a "financial crisis" looms ever larger? What will they do?
Why, they will buy.... even more US treasuries of course!!! (By the way, one of our friends, US Pessimist, who kept contradicting us) has since disappeared from these pages! Everyone else is quite welcome on our forum, of course - so long as you promise not to follow Bill Gross's advice - or the Reinharts' for that matter! Ciao.

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