Posted on 09/27/2012 9:42:18 AM PDT by Chickensoup
Consider farm land. As my very wise father-in-law told me
many times, “They ain’t makin’ no more of it.”
The Fed held $1.643 trillion today.
http://www.federalreserve.gov/releases/h41/current/
They held $1.663 trillion on September 29, 2011.
http://www.federalreserve.gov/releases/h41/20110929/
My quick, back of the envelope, calculation shows they hold $20 billion less than one year ago.
Rather than get into a mathematical pissing contest, let me just say that your statistics come from the same bunch of clowns that give us the unemployment rate, the rate of inflation and the weekly jobs statistics.
There is no way in hell that the Fed can be QEing us to death and end up holding less than a year ago. They are reclassifying categories and moving stuff from one column to another. No less a slight of hand than a government that claims $1/2 Trillion in Fannie/Freddie liabilities aren’t part of the deficit. Or that there is some mythical “surplus” of SS funds because the money was loaned to and spent by the federal government and in return this “trust fund” is populated with a bunch of less than worthless IOUs that aren’t even required by law to be paid back.
Enough of my rant. The Fed is buying a shitload of Treasuries. They can call it want they want, it’s happening.
It’s like sticking a hose up your butt and breathing your own farts and calling it oxygen.
No they don't. And keeping track of the amount of bonds you buy is a lot less subjective than estimating unemployment, inflation or weekly jobs.
There is no way in hell that the Fed can be QEing us to death and end up holding less than a year ago.
I see you've confused talking about QE with actually doing QE.
The Fed is buying a shitload of Treasuries.
No they aren't. Not today and not in the last year.
It’s like sticking a hose up your butt and breathing your own farts and calling it oxygen.
That may explain your poor math skills.
LOL, Good comeback!
But I’m not convinced
Yeah, who you gonna believe, the accountants who release a balance sheet once a week or some guy who thinks the Fed buys 75% of the federal debt, based on his imagination?
Yeah, that’s not what I mean and you should know it. If you know anything about accounting, particularly *government* accounting, the sleight of hand occurs not in subtracting 1 from 4 and getting 3. It’s in the definition of what each number is, how it is classified, where it should be placed, categorized and so on ad nauseum. My wife does accounting for a large corporation and works with some good sized numbers and multiple related corporations. It is often anything but straightforward. And she and her office are honest with no political agenda.
You can all me tin foil hattish if you like, it offends me not in the least. But don’t try to sell me the baloney that government accounting is anything straightforward. Or that I am somehow math challenged because I consider the highly politicized federal government and an entity like the Fed to be untrustworthy (har har). I will believe damn little those people say unless I am putting the numbers in the ledger myself.
Accountants or not, they have little credibility. Helicopter Ben says its sunny at high noon, I’m going to look out the window myself before I take his word for it.
My 75% statement was incorrect.
Absolutely! There are so many stupid government regulations telling companies how they have to account for inventory and allocating costs that I'm glad I never got into that end of the business.
Totally different than the Fed, which basically creates money out of thin air and buys a bond with the funds. That kind of accounting is very simple in comparison.
But don’t try to sell me the baloney that government accounting is anything straightforward.
I agree, government accounting (ha) is not straightforward at all. Again, very different than what the Fed does.
What changed your mind?
Well, because (this is painful) I am wrong in that the FED is directly buying all these new issue bonds.
But the US government is IMO somehow financing a lot of its cash needs via the FED, but in ways that are less obvious and difficult to understand. I have read that the FED is essentially selling short term bonds to buy 15-20 year bonds, maybe that works out to an accounting net. But it said that the FED has pretty much taken over the purchase of the long term stuff, that outside of other central banks, no one is buying the long term stuff.
Look, the federal government has expenses that have to be paid for every year, and keeping some of them off the books as “liabilities” may make the account ledger look better, but they still have to be financed.
I have read that the FED buys bonds through surrogates to make it appear that there is more interest in US debt than there really is. The technicalities are confusing to me, but I have no trouble believing that to be the case.
I do not believe that the US is legitimately selling the volume of Treasurys required to finance the tax shortfalls. The reported $1.3 trillion deficit is in reality much greater, as much as another $1/2 trillion.
The FED is creating gargantuan amounts of electronic money now. Some of that money must be getting used to purchase Treasurys by someone. What backroom deals are enticing other central banks to buy US bonds? Guaranteed lines of credit from the FED?
I’ll also fall back on my tin foil hat logic. If it quacks like a duck and has feathers and webbed feet, the stuff left behind isn’t cow patties.
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