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Fed Holdings Of U.S. Treasuries Surpass China's
Seeking Alpha ^ | 2-6-2011 | Doug Carey

Posted on 02/06/2011 6:27:17 PM PST by blam

Fed Holdings Of U.S. Treasuries Surpass China's

by: Doug Carey
February 06, 2011

A bit of recent news that hasn't gotten enough press is the fact that the Federal Reserve has surpassed China in total U.S. Treasury holdings and is now the largest holder of Treasuries in the world. As of last week, China held $896 billion of Treasuries while Japan held $877 billion. The Fed now holds $1.108 trillion and it has not even passed the halfway mark of its second round of money printing, which they call Quantitative Easing.

By June the Fed could own $1.6 trillion of Treasury bonds. The experiment that the Fed has embarked upon is simply unprecedented in this country. So far it has been an abysmal failure. Ten year treasury yields are nearly 120 basis points higher since the Fed announced their second round of Quantitative Easing just three months ago. Food inflation is raging throughout the world, even though Ben Bernanke denies any responsibility for it. Speculation is running rampant as to how much inflation the U.S. will export.

This is what fiat currencies and the printing of money bring: Rampant speculation and volatile prices. It is incredibly difficult to predict how the Fed’s printing will impact prices, so speculators are doing what they do: They’re jumping ahead of the curve and buying commodities before they all shoot through the roof.
Sugar is now at a 30 year high and cotton is at a 28 year high. Cotton has risen 100% in the past six months alone. All of this is happening while we’re supposed to be in a deflationary stage due to the credit collapse.

The Federal Reserve has been destroying our currency for nearly 100 years now. The dollar has lost 97% of its value since the Fed’s creation in 1913. But none of the Fed chairmen has been as bold as Ben Bernanke. What he is doing would have been impossible to fathom just three short years ago. It’s bad enough that the Fed is taking money from savers by holding short-term rates so low and giving it to the banks. To add insult to injury, the Fed debases the currency by printing trillions of dollars to prop up the government’s budget deficit. It is a terrible time to be a saver or to be living on a fixed income.
These are frightening times and it is prudent to prepare by owning gold and even stocks of companies that make things we truly need, such as food, water, and energy. The future depends partly on how much faith people lose in the dollar. A serious collapse of the dollar and hyperinflation likely won’t come from the physical printing of money itself. It will come from a breakdown of faith and confidence in our fiat system.


TOPICS: News/Current Events
KEYWORDS: bonds; feds; inflation; treasuries
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To: blam

This is nothing but money laundering, a complete and total crime.


41 posted on 02/06/2011 8:34:42 PM PST by CodeToad (Islam needs to be banned in the US and treated as a criminal enterprise.)
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To: Pelham
Priming the pump.

Thanks. That sounds more familiar.
All I know is that if this type of fiscal (ir)responsibility continues we'll be suckin' sand.

42 posted on 02/06/2011 8:34:42 PM PST by Tainan (Cogito Ergo Conservitus.)
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To: blam

The Bond Vigilantes will have more control over events than the Fed, just as they did in the ‘70s. Once they decide that too many dollars have been created they will start selling long term Treasuries with a vengeance, sending long term rates soaring. The Fed has only a limited time that they can use their QE tool.


43 posted on 02/06/2011 8:37:19 PM PST by Pelham (Islam, for the humorless life)
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To: dalereed; Greysard
"A friend of mine is currently fabricating 47k# per day with his contracts going way above that and it’s really smarting!"

I think Greysard described your friend in post #27.

44 posted on 02/06/2011 8:40:22 PM PST by blam
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To: Quix
Isn’t it still just funny money . . . a vast shell game?

Yes, but under one of those shells...is nothing. Just like the other ones.


Today is a good day to die.
I didn't say for whom.

45 posted on 02/06/2011 8:44:51 PM PST by The Comedian (Muslim Brotherhood = A.N.S.W.E.R = Soros = Obama)
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To: Pearls Before Swine

We’re all going to get our own personal unicorn that craps Skittle rainbows.


46 posted on 02/06/2011 8:50:47 PM PST by Leisler (Our debts are someone's profit. Follow the money, the vig.....)
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To: blam
Looks like the virgins at the Federal Reserve Bank are self-certifying their purity.

Why am I skeptical?

If the FED has crap on the books, when (Oh when?) will it be market to market and called speculative junk? ...

...Just curious....

47 posted on 02/06/2011 8:52:32 PM PST by pointsal
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To: The Comedian

RIGHT.


48 posted on 02/06/2011 8:59:22 PM PST by Quix (Times are a changin' INSURE you have believed in your heart & confessed Jesus as Lord Come NtheFlesh)
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To: kiryandil

How much gas at $10 will anyone buy?

A local gas station doubled it’s prices early morning of 9/11. The only reason I know that is because a home health nurse was headed out early morning to see a patient and needed gas. Nobody else needed gas that bad and by late morning the jerks had dropped their prices back to where they were when they were bypassed by everyone else.

That’s about all we have to control prices.


49 posted on 02/06/2011 9:07:53 PM PST by Cold Heart
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To: The Comedian

Ah, a fan of Red Dwarf, I see.


50 posted on 02/06/2011 9:50:56 PM PST by OneWingedShark (Q: Why am I here? A: To do Justly, to love mercy, and to walk humbly with my God.)
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To: Cold Heart
"That’s about all we have to control prices."

Here on the Gulf Coast we have gouging laws for hurricanes. The locals mind their P's and Q's though...we've put local gougers out of business afterwards too, people boycott them.

The locals have actually realized that it is a good time to show that they are a part of the community by helping where they can, like free ice, water and etc during black-outs. One restaurant provided 1/2 off meals for relief workers that come from out of state.

51 posted on 02/06/2011 10:12:52 PM PST by blam
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To: sickoflibs

Well... as P.T. Barnum once said... “There’s a sucker born every minute!”


52 posted on 02/06/2011 10:43:54 PM PST by April Lexington (Study the Constitution so you know what they are taking away!)
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To: blam
Ask this simple question... if the Treasury offers bonds and nobody buys them at the”target” interest rate except the Fed, who will buy those bonds from the Fed? Buyers will offer substantially less than the Fed paid to compensate for the added risk (real interest rate). If the Fed just holds to maturity, the Treasury will have to cough up the dough to pay off the bonds. It will either have to raise taxes on the stupid American serfs or issue more bonds to pay off the old bonds. Who will buy the new bonds at such low interest rates? Answer... the Fed. Money is now an illusion. The government has severed public spending from the tax paying base. It now taxes the peasants until they squeal and borrows the rest. From who? Not the Chines anymore. Nope. The Fed. The guys with the unlimited cash supply. So... watch public spending increase unabated and watch the money supply explode. Then... watch yourself become poor as the currency collapses. There is no stopping the nightmare now. The Government has figured out how to spend money without the burden of howling tax payers or recalcitrant lenders. Just pull it out of thin air and spend it to keep power.
53 posted on 02/06/2011 10:53:23 PM PST by April Lexington (Study the Constitution so you know what they are taking away!)
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To: blam

Like a thirsty man drinking his own piss. Ain’t going to work.


54 posted on 02/06/2011 11:00:30 PM PST by ccmay (Too much Law; not enough Order.)
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To: Visceral
foreign governments hold about 4.5 trillion. that leaves almost 9 trillion. Who holds that?

Mutual funds and banks, mostly. Think about that. wipe the vomit off your shirt and buy gold. NOW...

55 posted on 02/06/2011 11:03:29 PM PST by April Lexington (Study the Constitution so you know what they are taking away!)
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To: FromLori

Rolls of nickels could very well ave your life. Digital money may disappear but approximately 8-10% of money is paper and coin. Those who have paper and coin will be able to trade. Those with digital money will have to resort to barter or robbing those with paper money and coin. There will be nothing else to use until the next government issues some kind of new money... ugly times. So... rolls of nickels and pennies could save your life. keep the gold and silver for the remonitization.


56 posted on 02/06/2011 11:08:31 PM PST by April Lexington (Study the Constitution so you know what they are taking away!)
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To: April Lexington
"There is no stopping the nightmare now. "

Yup.

I guess there are many ways to say it, my old poker playing buddies have been saying for a couple years now that 'there's no peaceful way back from here.'

57 posted on 02/06/2011 11:42:29 PM PST by blam
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To: ccmay
"Like a thirsty man drinking his own piss. Ain’t going to work."

It does for a little while.(Same as this)

58 posted on 02/06/2011 11:43:52 PM PST by blam
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To: April Lexington
"There will be nothing else to use until the next government issues some kind of new money... ugly times."

A bag of dried beans will get ya something.

A bowl of bean and bacon soup with corn bread, sliced fresh tomatoes and a glass of sweet Southern style tea will get you even more.(prepare now)

59 posted on 02/06/2011 11:49:57 PM PST by blam
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To: freedomfiter2
Now’s a good time to end the FED.

Hire bodyguards and a food taster.

60 posted on 02/07/2011 3:58:18 AM PST by TheOldLady ("20 Years Ago Desert Storm began...where were you...?" "I believe I was hitting it." - Lazamataz)
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