Checks and balance in process

 Treasury yields have popped to .8% on the ten year. 

Rates cannot get lower. Why? Because the Fed is committed to collect at least 1/5 of the Swamp interest expenses, worth about a half point.  So the Swamp is covered up to 1.5 points on its interest charges. But that rate is about normal for this recession. 

What is not normal is having the regulated banks go tax collecting. A half point of tax collections is twice what a fair monopoly fee would be. But worse, that is slated to rise rapidly to nearly a point of tax collecting after covid gets a proper bet.  That amount of tax collecting is more than the regulated banks can bear. They will rebel, along with a bunch of new antificants. That problem is bound to become apparent in Q1, during tax scramble.  

Dodging that Fed tax has moved up in priority and this bodes ill for regulated banks. Finance will be confused for a moment, mistaking a yield play for what really is a tax dodge. If you believe the Fed will keep the Swamp liquid then you play the tax dodge. Keep liquidity in the shadow system, hence stocks, bit coin, home production, gold suddenly pop. They are all pre-dodging the Q1 tax scramble and it will continue for two quarters.

Shadow Banking in progress:

IRS Reels in Whale of an Offshore Tax Cheat -- and Goes for Another...

The U.S. pulls back the curtain on the shadowy world of wealthy American tax evaders

When we mix taxation and regulated banking then  we put the Swamp into a tax spiral of deflation, happening when all of government is inflation adjusted. This is our second, maybe third time through the loop, we cannot do a fourth. Banking will collapse, Facebook will be ourlashope.