Wednesday, November 17, 2010

HOT: Former Treasury Secretary Rubin: Bond Market Could Implode; Vote to Increase Deficit Could be the Trigger

Former Treasury Secretary Robert Rubin is laying it on the line. At a confrence today at the Pierre Hotel in NYC he said, according to Arron Tusk, that the soaring federal budget deficit and the Fed's quantitative easing are putting the U.S. in "terribly dangerous territory" and warned of a bond market "implosion."

Get this. He said Congress' vote on raising the deficit ceiling next spring could be the "trigger" for a rout in the Treasury market.

He also said  the Fed's plan to buy $600 billion of Treasuries "has a lot of risk,"  calling the international reaction "horrendous."


  1. Although it deserves to go lower, the US Treasury market has held up so far because of the lack of alternatives. If the problems of Ireland and club med countries are ameliorated, then an alternative will be created and US treasuries can be expected to sink, regardless of what Rubin says or what the congress fails to do.

  2. Bob certainly is in a position to know what he's talking about. His career was founded on destroying the country by financial fraud. Time to slither out under the cover of darkness Bob? Ya think creating the Fed was the death knell for the country.

  3. How can the bond (or any?)market implode if the Fed stands ready to act as buyer of last resort?

    Nominal values of bonds will not crater. Prices of necessities will soar.