[April Lexington]

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.

[blam]

"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.'

[Toddsterpatriot]

if the Treasury offers bonds and nobody buys them at the”target” interest rate

The "target" interest rate is whatever it takes to sell them.

who will buy those bonds from the Fed?

The Fed can hold the bonds until maturity.

[kiryandil]

Yep. Primary dealers are front-running the Fed, and us taxpeasants are the bag-holders.