[AgentR]

correct me if I'm wrong, but this is naked printing, right?

Its one step removed; but all thats left is one tiny baby step away from just ordering up a couple trillion in paper to fund the federal budget.

[frankthetank]

Circle jerk? Is that normal FED protocol?

This is major...or so i would think...spend your worthless dollars while you can!

[Jotapay]

correct me if I'm wrong, but this is naked printing, right?

Its one step removed; but all thats left is one tiny baby step away from just ordering up a couple trillion in paper to fund the federal budget.

How is it not naked printing? They fabricated money out of thin air to buy T-Bills, no?

[AgentR]

This is major...or so i would think...spend your worthless dollars while you can!

Don't go TOO hog wild. You've got taxes and/or debt that need paying, and they need paying in US Dollars. Protect your ability to pay them for any of the potential financial trajectories.

Do you have some money in investments that will track hyper inflation?

Do you have some money in something that will remain oblivious to harsh deflation?

Probably not a great time to sit around with $100k in a checking account, I'll grant you; but SPENDING is bad almost by definition.

[Tyler_JC]

The last step is the fact that the Fed is actually purchasing Treasuries with the intent of selling them at some later date to soak up the cash.

Naked printing would be buying the Treasuries and then burning them (never selling them).

The Fed has done some naked printing recently. When they bought a couple hundred billion dollars of mortgage debt that was not worth the money they paid for it, the premium was naked printing.

Fed spends $100 to buy an asset that can only be sold for $90. That extra $10 is new money that can never leave the system. AKA, unsterilized money.

The whole idea of the Fed buying assets is that at some later date they can sell them to get the cash back. If they can't sell them back for at least what they bought them for, the difference stays in the economy as "free" money.

[AgentR]

How is it not naked printing? They fabricated money out of thin air to buy T-Bills, no?

Money is always "fabricated"; the question is whether or not it is masked by a transaction of one asset for another. This is dangerously close to naked, but still allows people to preserve some belief than an asset of value was exchanged for another asset of value.

What you see today is a few million people getting a shiver down their spine, and then desperately trying to tell themselves, "nothing to see here, move along..."

[sameu]

Naked printing would be buying the Treasuries and then burning them (never selling them).

yes, I agree
but why wouldn't they burn it, it's an IOU to yourself, why wouldn't you burn it? or in others words, what assures us, that they in fact will sell it again at some point later?

[Jotapay]

yes, I agree
but why wouldn't they burn it, it's an IOU to yourself, why wouldn't you burn it? or in others words, what assures us, that they in fact will sell it again at some point later?

No one is going to buy them. I don't see that this action will increase confidence so that more of our T-bills will be purchased in the future. It's a very steep downhill slope from here, IMO.

[Jotapay]

How is it not naked printing? They fabricated money out of thin air to buy T-Bills, no?

Money is always "fabricated"; the question is whether or not it is masked by a transaction of one asset for another. This is dangerously close to naked, but still allows people to preserve some belief than an asset of value was exchanged for another asset of value.

The fed conjures up digital cash. The treasury conjures up debt (T-bills). They swap it.

No one is going to buy those T-bills unless a new one-world super-currency is issued in the future. This all ends in tears or else the one-world economic system Kissinger and Gordon Brown keep harping on about.

[smiley]

Big question is. Why does the FED assume that no one else will buy them?

What exactly did president Wen tell Clinton when she came asking for credit?

[Jotapay]

Big question is. Why does the FED assume that no one else will buy them?

This is a joke, right? The news has been stuffed with stories the past few months about demand evaporating for US debt.

[bencole]

I think it would be appropriate for the the federal reserve and the dept. of treasury to adopt a new common seal in light of recent events.

these should be changed:





I would suggest a design similar to this:

[ReverseEngineer]

Big question is. Why does the FED assume that no one else will buy them?

What exactly did president Wen tell Clinton when she came asking for credit?

You don't have to assume no one else will buy them. Nobody else CAN buy them. Nobody else has the MONEY to buy them. The money doesn't exist to buy this debt, trillions in new money is needed, and that is what they are printing, new money. Just this money doesn't have any backing at all. Who in the future would have the money to buy it either? Everybody is broke here under this system. Its worldwide bankruptcy, but they keep inventing new layers to disguise it. The IMF printing up SDRs would be yet another layer. It can't work though, its just mutual masturbation by the banksters.

Reverse Engineer

[Daniel_Plainview]

Big question is. Why does the FED assume that no one else will buy them?

This is a joke, right? The news has been stuffed with stories the past few months about demand evaporating for US debt.

Would you provide a link to such a story? I know that China has expressed trepidation as to the safety/security of further purchases of US treasuries, but I haven't read that the demand has been evaporating.

Thx in advance.

[seldom_seen]

Would you provide a link to such a story? I know that China has expressed trepidation as to the safety/security of further purchases of US treasuries, but I haven't read that the demand has been evaporating.

I posted this back on January 24:

U.S. Treasury 30-Year Bonds Post Biggest Weekly Loss Since 1987

Longer-term Treasuries sold off amid concern that debt sales will increase to pay for Obama’s economic stimulus plan, expected to cost $825 billion, and a budget deficit expected to grow to more than $1 trillion.

“The high level of inventory in coupons suggests a very grim backdrop,” UBS Securities LLC strategists led by Chris Ahrens wrote in a note to clients today. “We suspect that counterparties looking to sell positions into this capital- constrained universe are finding that dealers are not willing to bid aggressively to add to already-burgeoning positions.”

http://www.bloomberg.com/apps/news?pid= ... refer=home

This also supports what RE said, the money isn't there anymore to gobble up treasuries.

[heroineworshipper]

Funny that as soon as your government printed itself $300 billion, $300 billion was converted to gold. Another Obooboo victory. Nothing accomplished.

[seldom_seen]

If you read this story over at CNN, you'd think the Federal Reserve just saved the Earth and cured cancer:

Fed sparks rally on Wall Street

Major indexes extend gains after the U.S. central bank says it will buy Treasury bonds to increase liquidity.

"The Fed's actions to buy Treasurys is being hailed very positively," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research. "We've had some upward momentum already over the last couple days," he added. "And the Fed's action adds fuel to that fire."

http://money.cnn.com/2009/03/18/markets ... 2009031815

[Sixstrings]

This is the Big Headline on Drudge now:

SUPER PUMP: $1 TRILLION CREATED OUT OF THIN AIR