If the Fed Removes QE, Who Is Going to Buy All That Debt and Where Will Interest Rates End Up six months later and Where will Real Estate be Then?

While the dollar is falling the last few days we've seen commodities and particularly gold and silver being sold off by algorithms and the long giant bullion primary dealer banks increasing there never ending silver and gold shorts per US and UK central bank policy. The complete counter intuitiveness of this dichotomy is ample evidence of the degree of manipulation and anti-free market intervention that takes place in the corrupted financial system.

One of the biggest problems in the markets today besides the Fed is the mindless, soulless algorithms which have no fundamental comprehension of the nuances but are confined within the limited and unintelligent degrees or freedom or lack thereof of the modeling characteristics.

As Trader Dan from Jim Sinclair's jsmineset.com said today in regard to the psychotic nature of the algorithms and the manipulated markets:

"…There is also a further inclination to sell commodities in general which is hurting silver in particular as copper and crude oil are both weak, a development which tends to bring the overall sector into disfavor for the time being. That is a complete 180 degree flip from recent weeks when the “improving economy” theme led to ideas that commodity prices were going to move higher as demand globally soared and “risk” trades were jammed on. My how fickle these lovers have become!
When one sees the grains, all of which have a very bullish set of fundamentals also experiencing selling, you can rest assured that it is hedge fund algorithm selling which is occurring. Wheat, which at the immediate moment has the most bullish set of fundamentals going for it was even dragged lower early in the session. Even cotton, which went on overnight to make yet another 140 year high in price, did not escape the selling as it moved over 500 points off its best level after posting that astonishing figure. About the only commodity that I can see that did not move lower today were the hogs, which keep moving steadily higher as the cost for a nice pork chop or some slices of bacon keep heading up and up and up. …"
Now that consumer confidence is moving higher and the economy is improving bonds are moving higher. Yes, you read that correctly – higher. Nothing like official sector manipulation of interest rates in the name of sound economic management by the Central Bank to keep the markets running smoothly. One would think that with all the fears of QE being withdrawn by the Fed, (which is what is leading to selling in the commodity complex), that the bond market would be anticipating the same and would be moving lower since that is the sole factor that has been propping the market up. What do we get instead – more of the same QE as the Fed continues its purchases. Either the bond market has gotten it all wrong and the QE is going to continue indefinitely or the commodity sector has gotten it all wrong with that side of things expecting the QE to disappear. And one wonders why there is such stupidly insane volatility in all of our markets these days. If you want to find the chief culprit behind that, look no further than the boy wonders at the Fed, the source of all market mischief and mayhem…."
Even if the President freezes non-security discretionary spending for 50 years, the truth is that until the US either starts taxing its wealth human's and making pay for play the rule rather than the exception for corporations of US origin doing business here, then we will be borrowing money at these rates for the foreseeable future and that any substantial rise in interest rates will rapidly eat up all of the US discretionary budget and send the US in to default.
All the talk about QE2 ending as being the catalyst for the algorithms and funds to start selling commodities is pure nonsense and the fact remains that outside of some much needed small interest rate increases to get banks lending to small business, the absolute predicament of unrepayable debt and debt as far as the eye can see means that some form of QE, stealth, public or otherwise will continue. That means the dollar will continue to weaken. On the other hand if the Fed pulled in its QE wings, stopped buying Fannie and Freddie agency debt, the already faltering real estate market would go straight off a thousand foot cliff , the US economy would follow and the US would then hit a revenue crisis so large that national deficits of $2 trillion would be a walk in the park.

Besides all that, Wall Street is making a killing in free money with the Bond Churn scheme afforded by QE2 and they are making out like bandits. Why should the party stop at QE2?

Here are a couple of articles in support of the above assertions:

QE2 A Success: 56% Of Wall Street Gets Biggest Bonus Than Last Year

Today's Edition Of The FRBNY's "Flip That Bond" Criminal Reality Show Is Now In The Books, As Primary Dealers Continue To Churn Just Issued Bonds

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