Go here and read the Zero Hedge piece Chinese Treasury Dump Brings Holdings to 1 Year Low if you have not already seen it: http://www.biiwii.com/analysis
If England is allowing us to monetize our debt under some kind of covert agreement, it is probably not much different than the tools that the US would use to directly monetize its own debt, given the cozy relationship with our friends in the UK.
What is next, the seemingly way out there prospect of Congress directing individuals to hold these treasury instruments in their IRA’s? You hold an IRA, you are in bed with the government as they extend to you tax benefits in exchange for your compliance and adherence to convention.
A couple years ago we put an addition on our house. How’d we fund it? A loan? Ha ha ha… regular after tax brokerage savings? Are you kidding me, I worked hard for that ‘money’ and paid my taxes on it. It’s mine. No, I liquidated funds from the IRA’s and paid the penalty and taxes up front.
I have not contributed squat to the IRA’s since my financial awakening. After a financial adviser lost us 60% of our IRA’s in 2000/2001 and I yanked them away to learn portfolio management on the job, they are up about 240% – adjusted for withdrawals and what not. This is the NFTRH “Speculative” (as opposed to “capital preservation”) portfolio.
The main point is that I do not regard IRA’s as serious investment accounts (although they are mighty convenient vehicles up until liquidation) and have been on alert for years as to stirrings in Washington about policy that may target these massive repositories in waiting should the inflators become yet more desperate for treasury buyers. England is a lurch in that direction if what Zero Hedge speculates is at all near target.
Either way, this is inflationary. The confidence in the long bond is not what the chart says it is.