Deteriorating bonds and China: Bernanke will be forced into more quantitative easing

There’s an interesting analysis by John Hathaway, on King World News, about the corner Ben Bernanke has painted himself into recently, with his statement that he may not engage in any more quantitative easing.

Hathaway’s basic position is that as the Chinese economy slows down, the Chinese government will go into a trade deficit situation and be unable to purchase more US Treasury bonds, and with yields rising in the long-term bonds market, someone will need to step in to buy up those long-term bonds to keep interest rates down.

That someone, Hathaway predicts, will be Ben Bernanke (along with other central banks around the world).

There’s also the fascinating nugget of information, right at the end of the interview, that some gold-mining companies are about to start issuing dividends in gold money, rather than in paper money.

Here’s the 11-minute piece:

About Andy Duncan

An Austrian Internet Vigilante trying to live Outside the Asylum
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