US Treasury Auctions show the future of the economy...the key is the 10 year bond.

Two US Treasury auctions in the last two days tells you the economy is not getting better. The Agenda Press and politicians are trying to tell you otherwise, but markets do not lie since people are voting with their money. Obama today is out blaming you, me, and anyone else he can for this misery, but blame all you like it is real and on his watch.

Today's five year bond auction came in at less than one percent which is lower than anyone can remember. It looks to be .937% and was covered over 3 to 1, meaning there was three people lining up for every bond issued pushing rates down. Think about that people are so afraid that they are willing to tie up their money for under one percent for five years.

Yesterday's auction of two year paper came in at ,28% and was covered by over 4 to 1. That kind of interest does not even cover the inflation rate like the five year notes above.

The key rate here is the 10 year Treasury. If Europe continues to slide towards recession and the bond rate dips below 1.90% you can fully expect the US is either in or will be in recession in 2012.  Today's rate on these bonds is 1.94%.

The fed minutes released today are no comfort either. The comments for the November meeting say the committee discussed the weakening of the US economy.  The gloom came with no policy move because frankly the fed has no more bullets to shoot.

Add in the results of what is happening in Europe with today's problems of Austrian and Belgian attempts at selling their government bonds, which have had no problem until now. But with all due respect this is now the silly stage for savers and investors.  Giving your money to the US government money below inflation rate and with the fact the US is printing money at a 40% rate of government spending annually is plainly stupid.

When, not if, inflation finally blows up due to all this printing your bills and bonds will be virtually worthless unless you hold to maturity. I still believe very good blue chip stocks are much preferable to placing money at these rates. Even state issued municipal bonds are better.

Final note. Sooner or later rates WILL go up and if you think we have problems with government spending imagine having to pay even a low 2% or 3% on the huge national debt instead of the rates noted above. Do you not think your bonds could face haircuts and such if someone named Obama thinks you are the evil rich and can take the loss?  Nothing is sancrosant anymore.