Posted on 09/08/2009 12:13:26 PM PDT by h20skier66
BY END-JULY 2009, sales of new US Treasury bonds had already outstripped full-year sales in calendar 2008.
Creating money from nowhere, the Fed's asset-purchase scheme bought bonds equal to more than 18% of that 7-month record, effectively financing $224bn of the total $1.2 trillion in new government bonds.
No, the Fed didn't simply hand that cash straight to the government. But it funded the national debt via the primary dealers who did buy the bonds...only to sell them onto the Fed...and thus stumped up 32% of the net cash flowing to Treasury from its bond sales (gross issuance minus maturities). Which was handy.
Because the sums raised by personal taxation fell by one-fifth in the second quarter compared with April-to-June 2008. Federal spending rose 6.4% regardless. Money from nowhere sure helped.
What of the queasing itself, however? Quantitative Easing had a marked effect when the Fed announced its plan in mid-March. But easing longer-term rates with quantity hasn't yet worked as advertised.
(Excerpt) Read more at commoditynewscenter.com ...
Gold
Oil
Foreign Stocks (unhedged)
Foreign Bonds (unhedged)
Foreign Currency MMFs
Dump U.S. assets. The Dollar is gonna get pounded when the ship turns around even a little bit.
China owns nearly $800 billion of that debt.
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