The Interest Rate Shock Will Blow Up The Government's Ponzi Game

 The key reason for the rise in capital market interest rates is the central banks' interest rate hikes-a direct response to sky-high inflation.

At the beginning of March 2022, the US long-term interest rate fell below the short-term yield-so the yield curve became "Inverted," a clear indication that investors expected short-term interest rates to be cut sooner rather than later.

Anyone who holds US dollars or invests in US debt securities demands a higher interest rate.

Now, interest rates have fallen over the last four decades, and the fraudulent game has worked quite well-for the states and the special interest groups that seek to harness this game for their own purposes.

Maybe the bond markets will calm down again before things get explosive? Will US long-term interest rates find a new footing at, say, 5.5 to 6.0 percent? Will interest rates like in the 1980s-bond yields of more than 10 percent-return? The correct answer to these questions is of utmost importance for investment success.

Central banks, for example, will start buying government bonds again, thereby fixing long-term and short-term interest rates at "Reasonable" levels.

That is the big lesson that can be drawn from the interest rate shock resulting from the Ponzi scheme in the debt markets: the systematic decline in the purchasing power of money, even if short-term relief is granted, is almost certain. 

https://mises.org/wire/interest-rate-shock-will-blow-governments-ponzi-game