“There is an advantage to funding the debt, especially when interest rates are very low, by issuing long-term debt, and I would be very pleased to look at this issue and examine what the market would be like for bonds of this maturity,” Yellen said when asked about longer-term debt, including 50-year Treasuries.
That drove up long-term rates and steepened the yield curve, with the gap between 5- and 30-year bonds reaching a daily high of 140 basis points. The move was pared some, with the spread recently around 138.8 basis points.
And rates immediately shot up in response. The reaction shows what we face, we are being forced to pay the natural rate for government, always, about 2%.
Yellen learns she has one choice, raise flat taxes so the Fed does not get fiat banks in the tax collection business. he has no way out, and during each meeting with the delusionals they will hound her for an exit that does not exist.
How long will she espouse the nonsense? That means, how long before California is in serious trouble with no escape.
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