“Sure sounds like the Fed is going to own some of our debt.”
I’m not sure what you want me to explain. I said the Treasury doesn’t own any of our debt, which it doesn’t.
The Treasury isn’t the Fed. The Fed on the other hand holds a very large portion of our national debt, which it uses to manage the money supply. The Fed purchases, or monetizes, Treasury debt when they want to put liquid money into the banking system. They are doing this right now to counteract deflation that is occurring from debt default. The Fed will sell that Treasury debt back to the banks to soak up liquid money when they begin to see inflation.
Easier said than done. The "begin to see inflation" was 2008 but we saw a massive credit contraction right after that. As for the Fed selling that smelly stuff to anyone, the only reason anyone is buying any of it is that Fed is the greatest fool who will take it off someone's hands. It's quite telling to see "flight to safety" each time that the market thinks there will be "deflation". In reality it is the market loading up for short term speculative profits. The t-bill market is strictly pump and dump knowning that the ultimate greatest fool of all time will be there to buy no matter how bad things get.
Until of course the Fed decides to regain its sanity.
Oh, I see where I goofed. I posted “Treasury” when I meant the Fed. Thanks for the correction.