Why is the Fed quietly buying billions in bonds — and hoping nobody notices? How the Fed’s ‘stealth QE’ is bullish for bitcoin, gold and commodities.

marketwatch ^ | Charlie Garcia

[NoLibZone]

The U.S. Federal Reserve just pulled off something stealthy — over four days last week, without fanfare, the Fed vacuumed up $43.6 billion in U.S. Treasurys. That’s $8.8 billion in long-dated 30-year bonds on May 8 alone, plus another $34.8 billion earlier in the week. Not exactly small change.

Quietly returning to the quantitative-easing trough isn’t standard Fed housekeeping — it’s like a bank robber returning to the scene because he forgot his car keys.

Let’s talk straight: This isn’t tightening. It’s stealth easing. It’s monetary policy on tiptoes. Some traders have begun to notice, and smart investors should too.

Commodity traders, in particular, have a nose for monetary sleight-of-hand. Gold GC00 +0.57% , the ultimate financial cynic’s metal, has risen sharply since early 2024. Gold doesn’t believe in politicians, central bankers or economists — even the Ivy League types who wave their hands and promise stability. It believes numbers.

But this isn’t just a U.S. game. China has jumped into the gold pit too, and brings a bigger shovel. China’s central bank just cranked open the vault doors by dramatically raising gold-import quotas, letting local banks swap U.S. dollars DX00 -0.10% directly for bullion.

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TOPICS: News/Current Events
KEYWORDS: btc; debt; deficit; gold; inflation; qe

[Right_Wing_Madman]

over four days last week, without fanfare, the Fed vacuumed up $43.6 billion in U.S. Treasurys.

Trump wants lower rates, but the Treasury can't even find enough buyers for bonds at current rates. The market says rates should be higher, not lower. Rough times ahead.

[delta7]

The Fed buys when no one else wants our debt…throw in another historic fact: yesterday the first time in history US Treasury Debt Instruments were downgraded by the big three, no longer AAA rated.

Keep in mind it gets worse, most Pension funds and Sovereign Wealth funds prohibit “ investment “ in anything but AAA….heading towards Junk?

[thinden]

Wary inkterestink

[OrioleFan]

Jerome Powell will adjust rates next year to torpedo Republican chances in the midterms. He hates President Trump.

[Vaduz]

Indeed he’s a big problem that need to be addressed some how asap.

[enumerated]

Foreign central banks aren’t buying them - that’s why.

Someone needs to buy up our $37 Trillion of debt.

[Right_Wing_Madman]

Indeed he’s a big problem

Powell is 2% of the problem. The other 98% is the enormous amount of US debt. Right now, the Treasury is telling the Fed to pound a square peg into a round hole. Powell (and his computers) knows the math doesn't work.

[delta7]

You left out the best part.

“But this isn’t just a U.S. game. China has jumped into the gold pit too, and brings a bigger shovel. China’s central bank just cranked open the vault doors by dramatically raising gold-import quotas, letting local banks swap U.S. dollars
DX00
-0.10%
directly for bullion….That’s China quietly telling Uncle Sam that holding all those U.S. Treasurys is starting to feel less like prudent investing and more like playing roulette with the house on fire.

Think about it. Even if China converts into gold a modest 10% of the $784 billion Treasury stash it held as of February, it would send tremors through global markets.

China isn’t hoarding gold because it matches the curtains — it’s preparing for a monetary earthquake. Central banks around the world are doing the same. America just imported a mountain of gold. Nations are bracing for the next seismic shift in global monetary power…..”
——————
Good to see our Western MSM finally reporting the upcoming train wreck….something a few of us saw months ago. Most Americans are heading into a huge haircut, and the few others that have been following closely, prosperity.

If the world’s Central Banks are shedding US Debt instruments and buying historic amounts of Gold instead, a thinker must ask why?

[citizen]

I don’t know the financial world but this sounds like the US gov’t taking $Billions out of one pocket and buying US treasuries to shove into the other pocket.

IOW, the US treasuries aren’t selling...

[tired&retired]

I’ve been posting on this topic for months.

The are not just purchasing government debt. They are printing money to do it.

Just put a graph of M1 Money Supply next to Fed Debt Holdings and it is obvious.

[Right_Wing_Madman]

Someone needs to buy up our $37 Trillion of debt.

Somebody already bought the $37 trillion in debt. Domestic creditors (including the Fed) hold about 75% of the debt, and foreign creditors hold 25%. The US Treasury has two problems:

- They can't find enough buyers for new debt.
- They can't find enough buyers to replace bonds that mature.

[SaxxonWoods]

Why? Doesn’t matter now, it’s all ruined because you noticed.

[delta7]

Someone needs to buy up our $37 Trillion of debt.
————-
Good Luck, more than $$$ 8 trillion ( some say $11 Trillion) comes due by the end of the year…..and there are fewer buyers each day…..the US snake is now eating it’s tail.

Exactly how all 4,000 paper currencies in history have ended. I expect the US to be no different….NOT the end of the world, trade and commerce must always continue….with the world’s Wealth moving from the West to the East, it validates
just another cycle shift.

[ComputerGuy]

...Someone needs to buy up our $37 Trillion of debt...

We do carry a certain amount of baggage, don't we?

[Toddsterpatriot]

Why is the Fed quietly buying billions in bonds — and hoping nobody notices?

Nobody noticed, because they didn't.

They owned Treasuries in the amount of 4,217,638 (millions) on April 30th, 4,215,960 (millions) on May 7th and 4,216,260 (millions) on May 14th.

[PeterPrinciple]

no longer AAA rated.

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so who has AAA rate?

[tired&retired]

The Fed purchas the Treasury Securities at auction to keep interest rates low.

The Fed just outbids other buyers. Since the Securities are sold at a discount the higher price gives lower interest rates.

[Bobbyvotes]

Correct senor! $37,000,000,0000,000 is held in Treasury bonds which mature anywhere from few months to 30 years. When a bond matures someone needs to buy that bond, otherwise FED sucks it in with electronic wizardy. National debt is NOT JUST A NUMBER. It requires servicing in the form of interest paid via federal budget. Currently it is running about $1 Trillion per year. If foreigners are not buying our bonds, those interest rates will creep up. In the meanwhile Americans are loading up on stocks, which are more over valued than at the high point in 1929 before the crash. Depression followed. Even gold crashed during depression in 1930’s since few had cash to buy gold.

[Georgia Girl 2]

Its not new they’ve done it before.