If I am reading the Fed data right Treasuries has gone up from $474 billion a year ago to $776 billion. Also, the Fed buying other securities has enabled banks and the like to stock up on Treasuries; replaceing crap with Treasuries.
On October 10, 2007, the Fed held $779.6 billion in Treasuries. Looks like we're down a bit since then.
Treasuries may very well soon be crap themselves.
As someone else said, borrowing from yourself (the Fed buying Treasuries) is like sticking a hose in your butt and breathing your own f*rts.