Treasury Securities

Wall Street Forcing Congress to Raise the Debt Ceiling

Who sets the interest rates on US Treasury Securities (e.g. Treasury Bills)? We have heard that defaulting on increasing our national debt limit, not actually defaulting on the debt, but defaulting on raising that debt limit, will crash our economy because interest rates on our US Treasury Bills will skyrocket, increasing the costs to fund this unsustainable federal debt.

Treasury Secretary Jacob Lew, even went before the Senate, scaring us all towards the assumption that if we don't surrender to increasing our debt and future insolvency, we will be punished with higher interest rates, costing our country even more money.

So who set's the interest rates on US Treasury Bills and Bonds? Who is this great exploiter with the power to raise interest rates so they double within 24 hours (like they did in the days leading up to Jacob Lew's presentation before Congress), which villainous loan sharks have such power over one of the world's most formidable countries?

If you look at the Daily Treasury Interest Rates one can see these incredible hikes to the rate, but how did this rate jump up so high so quickly? According to our Federal Reserve the interest rates on Treasury Bills is determined by those bidding on and purchasing the Bills.

If we look at the Federal Reserve's information on who purchases the bulk of these Treasury Bills, thus influencing the interest rates the most, we see over 75% of these Bills are purchased by what are known as Treasury Securities Dealers and Brokers.

If we look at the Federal Reserve's information on who the Dealers are we see something very troubling, the Dealers and Brokers most directly responsible for setting the interest rates with their bulk bids and purchases, are the same banks we bailed out with our tax dollars when they were on the brink of failure in 2008.

They are also the same banks who members sit on the various Federal Reserve Boards across the country, and those same transnational banks associated with setting the LIBOR rate.

I unfortunately do not hold a vast knowledge on the subject, but it appears as if government along with their collusion buddies (transnational banks and financial firms) set the interest rate through direct and indirect bulk purchases of Treasury securities.

All of this leaves me very confused, which is the number one tool in any central banker's toolkit. I can't for the life of me understand why rates would increase so rapidly if not artificially done so for political or economic reasons, or since both of those things are always tethered together in a capitalistic society, some small group of people must be enriching themselves fabulously, while swaying governance, and forcing Congress to raise the debt limit.

After all, who prospers when there is more debt to earn an interest stream off of? Transnational banks financing it all prosper from raising our debt ceiling. A group of people not voted into office, and who have not gained their power and influence through democratic processes, rendering them a real danger to our Republic, observably so if we look at the volatile daily Treasury Bills interest rates, and what that means to our overall economic prosperity.

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Updated Jun 20, 2018 4:17 PM UTC | More details


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