The House just passed over $400 trillion in spending and Obama puts forward over $600 billion in health care funding.

So that is another trillion this week.   A trillion last week, too.

I wonder how many weeks in a row we can spend a trillion dollars and still be able to sell treas securities to finance it.  We are already very close to the point where the market will treat treasury securities as valueless, and folks (like the Chinese Government) will seek other homes for the trillions they already hold.

I keep saying it, and we saw it recently with the mortgage securities market: you can fools the securities markets.  Adam Smith’s invisible hand will always reveal the truth of securities value.  Collectively, you can always trust the bond traders.