Daily Pfennig - 8/6/2009

http://www.dailypfennig.com/

"...tax receipts in the U.S. are the worst since the Great Depression, and if they continue on this path, could pass that awful period of time for the top spot! My friend, the Mogambo Guru, had this to say, in that "special" Mogambo way of describing something... Let's listen in...

"In fact, speaking of taxes, it makes your hat fly up comically off your head in astonishment when you realize that total income and corporate taxes are less than this year’s federal budget deficit alone! And then you really start screaming your guts out in anger when you then realize that the total federal budget is 400% of total federal revenues! They are spending four times as much as they take in! Four times as much!"..."

"...for some time now I've written about the Treasury Bubble popping... And those darn Fed Reserve purchases of Treasuries kept a lid on the losses mounting... But, it appears that the cartel, I mean Fed Reserve has backed off their purchases... And Treasury yields are once again on the rise... And for those of you new to bonds, they work like this... As a bond's yield goes up, the price goes down, and vice versa... So... In January this year, the 10-yr Treasury yield was 2%... In June it reached 3.80%, then the cartel, I mean Fed Reserve bought Treasuries, and the yield on the 10-yr fell to 3.12%... But in the past three weeks, those yields have risen once again to 3.73%... Looks like the Bubble popping is once again on the table, eh?

You've got the U.S. issuing more and more Treasuries to finance their deficit spending, and on the other side you've got Treasury holders unloading them on the markets... That looks like a perfect storm brewing, folks..."