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March 23, 2013

The Fed Knows That Major Banks Would Fail If The Bond Market Crashed

"Given our past experience with bursting bubbles, would it not have been wise for the Fed to consider whether banks could withstand the bursting of the Treasury bond bubble, which many suggest is the biggest bubble of them all? But since the Fed did not recognize the smaller bubbles until after they burst, it is not surprising that they are equally blind to this one? The Fed, after all, does not have a history of learning from its mistakes. However, I believe the oversight is no accident. The Fed knows that major banks would fail if the bond market crashed, but it does not want to shake the confidence that is essential to the current economy." - in MarketPlayground

Related stocks and ETFs: iShares Lehman 7-10 Year Treasury Bond ETF (IEF), iShares Barclays 20+ Year Treasury Bond ETF (TLT), Bank Of America (BAC), JP Morgan (JPM), Citigroup (C), Wells Fargo (WFC)

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.
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