The new math...

[usta in Portland]

AAA - AA+ = -$1.03T

S&P downgrade cost the equity markets this much and the result was a flight of capital to the now downgraded US securities meaning that the goverment financed it's deficit for the quarter at the lowest rates ever! 2 year notes were at .22% interest rates. Take inflation into account and those investors are paying to have the government hold their principle.
WOW!

 

[Matthew]

Yeah, and they say there is a bubble in the gold market. When you take into count what is likely real inflation (not CPI propaganda) every 30 year mortgage is losing money (especially with price deflation in the housing market). When the dam breaks it's going to be really ugly. Every bank that should have gone under is going to fail and with inflation at high levels the government won't be able to stop it.

The fact the people are willing to pay the government to hold their money just goes to show how much irrationality there is in the market. Clearly the mainstream financial sector has no idea what they are doing. They are forgetting that "past performance is not indicative of future results".