Up, Up and Away!

Mark Steyn made an interesting catch that I had not seen in the run up to Thanksgiving. Germany was selling government bonds on Wednesday and didn't get any buyers at the interest rate offered. What does that have to do with us? Consider:

"The advantage the United States enjoys is that, unlike Greece, it can print the currency in which its debt is denominated. But, even so, it still needs someone to buy it. The failure of Germany’s bond auction on Wednesday suggests that the world is running out of buyers for Western sovereign debt at historically low interest rates."

 www.nationalreview.com/articles/284111/more-more-more-mark-steyn

Ergo - interest rates will go up. For everything. And where they will stop, no one knows. People and institutions with serious money don't have to buy bonds. They can buy gold, silver, oil, countries - almost anything. If they perceive government bonds as a poor investment they may not buy them at any price and then the EU's and the U.S. government's Disneyland economics will come to a rapid and painful end. Unfortunately, we get to go along for the ride.