Latest crazy plan from the USA

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On Fri, 11 Jan 2013 10:00:18 -0800 (PST), " snipped-for-privacy@optonline.net"

You obviously don't know the differece between position and velocity.
...but to answer your question. http://www.bloomberg.com/news/2012-12-03/treasury-scarcity-to-grow-as-fed-buys-90-of-new-bonds.html

See above.

The Fed's charter is not to regulate the economy, rather the currency. There *IS* a difference.
<...>
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On Jan 11, 3:32 pm, snipped-for-privacy@attt.bizz wrote:

I thought we were discussing what the FED is doing, not physics.

That's not 90% of federal govt bonds issued. That 90% number includes MORTGAGE securities that have nothing to do with the federal debt issued. They are actually buying $45bil a month, or $540bil a year worth of US bonds. And they are doing that mostly by issuing short term bonds to cover it, not by creating new money. It's effectively spreading short term debt versus long. Still $540bil is about half of the new debt, which is a lot, I'll give you that.
The rest of that article confirms what I have been saying. That the market for US Tbonds remains solid, attracting investors from around the world. Note that I'm not saying I would buy them, just that there are other participants taking the other half of the newly issued debt.


Nothing above addresses the fact that as the economy recovers, the FED will reverse it's operations as it has since it's inception. It will start selling the securities it has bought. You can't just focus on one half of the process and ignore the other.
Do you also deny that higher economic growth is key to bringing down the deficit? That growth of 4% or 6% would not bring in a huge amount of additional revenue?

"The Congress established three key objectives for monetary policy— maximum employment, stable prices, and moderate long-term interest rates—in the Federal Reserve Act.[10] The first two objectives are sometimes referred to as the Federal Reserve's dual mandate.[11]"
When it's charter from day one is to maximize employment, maintain stable prices, and moderate long-term interest rates, I'd say that is one form of regulating the economy. Who took the lead in response to the recent great recession? The FED. They agressively lowered short term rates, QE, etc. That's regulating the economy in my book. They are continuing to do it right now, which some of you are in fact bitching about.
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On Fri, 11 Jan 2013 16:23:32 -0800 (PST), " snipped-for-privacy@optonline.net"

Clearly you don't understand much.

You're too funny. Keep your shades on.

Idiot. NEW there is no market for NEW bonds. The government is artificially keeping the lid on the interest rates so NO ONE WANTS THEM. Good Lord, you're dense. <...>
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On Jan 12, 12:41 am, snipped-for-privacy@attt.bizz wrote:

No response to the actual points noted.

And as usual, having lost the argument, now the name calling begins. There is no inherent difference between "new" bonds and bonds already out there. Most bonds don't just get sold once and then locked away for 20 years any more than IBM stock does. About $1tril of US bonds are traded every day. It's a huge market. And as your own link pointed out, the participants are from all over the world. Are you claiming it's only the FED on the buy side of that $1 tril a day? You own link shows the FED is only buying $45bil a MONTH, which is only $2.5bil a day. It's two orders of magnitude less than the daily trading volume and only half the newly issued bonds.
That does not equate to "no one wants bonds" or "there is no market for new bonds".
Here from CNBC, just 6 months ago:
http://www.cnbc.com/id/47738555/Guess_Who039s_Buying_All_the_Bonds_It039s_Not_the_Fed
"Guess Who's Buying All the Bonds? (It's Not the Fed)
Mom-and-pop investors, and not the Federal Reserve, have been the ones most responsible for driving the mad dash to government debt, according to newly released data. The Fed's ambitious Treasury-buying program has pushed the central bank's balance sheet to $2.83 trillion and, by many accounts, the benchmark 10-year Treasuryyield to record lows, most recently to 1.56 percent.
But despite the low yields, it's been retail investors most responsible for the recent move plunge.
"The conventional view is that 10-year Treasury yields have been pushed down to 1.5 percent and 10-year (Treasury Inflation Protected Securities) yields to -0.5% by the actions of the Federal Reserve and the safe haven demand from foreign investors," Capital Economics said in a research note. "The reality, however, is slightly different."
The demand among average investors has swelled so much, in fact, that they bought more Treasurys in the first quarter than foreigners and the Fed combined.
Households picked up about $170 billion in the low-yielding government debt during the quarter, while foreigners increased their holdings by $110 billion. "
Now there it is, EXACTLY what I've been saying. So now I'm sure having proven you wrong once again, the usual name calling will continue.
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wrote:

Well you are usually the one who starts it. (The name calling)
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The very thread you just replied to shows that once again you are wrong.
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On Fri, 11 Jan 2013 07:06:32 -0800 (PST), " snipped-for-privacy@optonline.net"

The fed is buying something around 80% of the T-bills, now; the rest is close 'nuff to "none".

You're a dreamer, but maybe. The government might also try to grow at 10%, or more.

The CBO's debt estimate for this year. Nope. Last year was about $1.1T. This year will be far worse.

Now take the first derivative and get back to me.

The new debt is being bought by the Fed because no one wants it at zero interest.

Go back to sleep.
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The law isn't that clear. The meaning is but the language isn't.
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wrote:

The process will trigger more inflation. They just print more $. But actually they are stealing money out of the pocket of the public because the money in their pockets becomes worth less. It's a cunning form of taxation. You need to but some physical asset.
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It will trigger more inflation only if it is not reversed as the economy recovers. And reversing it is exactly what the FED is going to be doing. It's exactly what the Bank of England has been doing, the ECB and virtually every other central bank in developed countries.
What would you do? Keep money tight and go into a depression? Yeah, there is some risk of higher inflation. But compared to a depression, it's clearly the acceptable risk.
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wrote:

Things are no better over here in the UK. I don't know what the answer is. But minting some foolish coin won't help. But someone is going to have to pay. It won't be the rich, it will be the ordinary person. And it will be done by means of inflation. There are a lot of people over here never experienced hard times. They think hard times is not having a cellphone.
I think we are all in for a Greek experience. The gov. is just postphoning the bad things until the next election.
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On Thu, 10 Jan 2013 09:34:33 -0800 (PST), " snipped-for-privacy@optonline.net"

Therein lies the problem. The government does not have the money to redeem that bond. That is why the Fed is papering over them in the first place. If we actually sold them to a real person, they would expect to be paid back.
The fact is, every dime collected in revenue barely services the interest on the debt and covers the entitlements. All of the other spending, defense, education, security, everything else, is on the credit card.
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On Jan 10, 3:30 pm, snipped-for-privacy@aol.com wrote:

Those bonds are sold for the most part, in the marketplace. They are traded just like any other bond every day, Clearly investors worldwide still consider them a very safe investment, among the safest in the world. And most corporations could not redeem all their bonds that are outstanding either. Like the federal govt, the corporation only redeems those that they need to because they are coming due, or that they choose to buy back early, etc.
The FED has been conducting exactly the same bond operations since it's creation, without regard to the budget deficit or level of federal debt. They are doing it to regulate the economy. The economy has been so weak that the FED aggressively bought bonds in unprecedented amounts. That puts $$$ into the economy and keeps interest rates very low. Those low interest rates are finally helping turn housing around, for example. Would you prefer they not do that and we enter a depression?
Just like in every other business cycle, when the economy recovers enough, the FED will start selling those bonds it bought, reducing the money supply. For them to do so there is no requirement that the govt redeem the bond. They just sell the bond in the bond market like any other bond.

Yes, agreed. And that is the scary part that the general public either doesn't understand or does not want to understand.
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On Thu, 10 Jan 2013 13:41:40 -0800 (PST), " snipped-for-privacy@optonline.net"

The problem is that market is pretty soft right now and they can't find enough buyers at the interest we are willing to pay, hence the government buys them
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On Thu, 10 Jan 2013 20:15:11 -0500, snipped-for-privacy@aol.com wrote:

Give that man a cigar. No needs anymore wallpaper. However, Obama needs to keep the interest rate artificially low, so it's the Fed to the rescue. Amazing how that works.
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On Jan 10, 8:15 pm, snipped-for-privacy@aol.com wrote:

Are you denying that the FED has been conducting these same bond market operations since it's creation? That it's done as one of the main jobs of the FED? To regulate the supply of money in relation to the economy? You make it sound like the FED just started doing this because there are no other buyers for US bonds. KRW just posted a link that shows that while the FED is the largest single holder of US debt, they hold only $1.6tril, or 10% of the total outstanding. Clearly the market is not soft, because the other 90% found a home. The US sold $1.1 tril more just last year, it sold $6tril over the last 4 years, yet the FED holds in total just $1.6tril.
If mutual fund XYZ owned say 10% of Apple, would you say there is no market for Apple stock? That they can't find enough buyers?
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On 01-10-2013 16:41, snipped-for-privacy@optonline.net wrote:

One day, I had to ask myself, isn't it hypocritical of me to preach against government borrowing but then loan money to the government by purchasing bonds or having too much tax withheld?
--
Wes Groleau

In any formula, constants (especially those obtained
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On Fri, 11 Jan 2013 02:03:23 -0500, Wes Groleau

I certainly think it's immoral to have too much tax withheld, though I think I did this year (I forgot to adjust for the mortgage and taxes on two houses, moving expenses, and a bunch of other one-time stuff). I generally owe $4-5K on the 4/15. I highly doubt I will this year.
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On Jan 10, 11:04 am, snipped-for-privacy@aol.com wrote:

In gold it would be around 45 Million POUNDS.
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Alfred E. Newman. A black and white spy.
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