Time to step back as an investor still may have a few dollars available and think very hard about not what the return-on-capital might be but rather focus on the return of capital and whether the fiat currency system(s) is a safe place for its encapsulated wealth at all!
Let's weigh today's basics with Bob Chapman..
October 5, 2011
Why would, almost non-yielding , be a safe haven, when the government is broke? We would guess that, when a US dollar collapse comes, that owners of such bonds, notes and bills would like to lose equally what everyone else holding these debt instruments loses. We call it a commitment to stupidity. Those that see the folly in such action switch their cash flow to commodities, gold and silver. From a rational point of view such a switch is logical. Needless to say, central bankers, government bureaucrats and politicians get upset when investors engage in such alternatives and proceed to manipulate markets to their own satisfaction to the detriment of the people. We have to wonder what is so attractive about owning debt that pays little or no interest? In order to avoid such a dilemma one must step out of the box and separate themselves from the investment sheeple.
Over the past three years the Federal Reserve has purchased $2.25 trillion of Treasuries, Agencies and mortgage bonds known as toxic waste. We have no idea what the cost of this debt was and what its current value is marked to market. All we know is the Fed has debt on its books of some $3 trillion that they admit to. The Fed operates in secret and when asked difficult questions about its operations it says it is a state secret. Fortunately the court system and Dodd-Frank have uncovered some of these secrets, like a few trillion here they forget to tell us about and $16.1 trillion there that they covered up. These monies, that the Fed created out of thin air, went to transnational conglomerates and the banking and financial sectors in the US, England and Europe. A tight elitist connected group, that for some reason the Fed didn’t want to tell us about. The Fed bailed out temporarily banking in the western world and is still brazenly doing so. The latest caper was a $500 billion swap to again bailout European banks. Of course, three other central banks were supposedly partners in this bailout. If you believe that we have a bridge you’d really be interested in for sale. These people in the Fed and within government are incapable of telling the truth. Yes, the Fed creates reserves, totally without collateralization by buying Treasuries and other securities. No, they are not printing paper money, but what they are doing is tantamount to that.