I just always wonder how serious somebody is when they suggest something like this. They make it sound like the govenment can just do whatever they want, and there would be no consequences.

No one is suggesting that we lend 1,200 trillion to regular folks. Only the banskters get that.

The point being that's it's unfair that the big banks and hedge funds get to do this while the rest of us have to struggle with high unemployment and underwater mortgages.

Seriously, they've been doing EXACTLY that, doing what they want consequences be damned, for the last 30 years.

The only difference is this proposal would get them to do it for the huddled masses, not just the elite 1%.

It only works if there are a few getting the loan so that it's not inflationary. Then the rate on the loan won't be rising. If interest rates do rise the value of your bonds fall and then will you have enough to pay back the loan? You could possibly be very very screwed.

If you buy $10 Million 10 year notes and the yield increases by 0.01%, then you lose roughly $6,700 - which is a lot when you are highly leveraged as this satirical article is assuming. Now note that the daily move in 10 year yields has a standard deviation of around 0.06-0.08% - you can get smashed by a highly leveraged carry trade if you are clueless since those potential losses from daily changes in the yield dwarf the one day of interest you earn of about 2% /365 * 10MM = $548.

Not to mention that the cheap funding probably won't last to term.

Definitely satire. K&R

Who would want to live in a society like that?

Much better that it stays in the pockets of wall street where it can be put to good use generating more capital.