Rhunzzz

How Investors Can Profit from the Coming Bear Market in Bonds

Dear Sir,

I agree with your suggestion of the Treasury issuing bonds directly to the Fed in exchange for cash which would then go to finance spending increases and tax cuts. This would be inflationary, which is the whole point in a situation where deflation is a threat, and would create new cash that can be used for stimulus, WITHOUT increasing bond yields.

Still, the end result may be the same - long-term interest rates may have to go up because eventually the inflationary genie must be put back in its bottle, after it has done its work of course.