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Fed Treasury Holdings: $1,000,341,000,000
It's time for the Fed "one trillion" hats- as of 2:00 pm Eastern, the Fed's Treasury holdings have surpassed $1 trillion. Add to this the well over $1 trillion in MBS and agency debt held by the Fed, and there is your perfectly quantified reason why the S&P has just hit a two year high, and why the Nasdaq bubble is alive, back, and will soon retest its 2000 highs. Basically, with the Fed the de facto purchaser of all securities with a yield of under 4%, the entire definition of a risk-free rate per the MPT has to be scrubbed. To be sure, risk-free will very quickly become risk-full when and if the Fed, in its attempts to succeed with central planning where so many have failed before, either finally loses control over rates, or far less probably, decides to remove some of these extra trillions in free liquidity. Until then, the banker party is on in full force. The reason for the penetration of this key psychological barrier was the completion of today's second POMO operation, which added $1.619 billion in TIPS securities. By the end of this month, the difference between the Fed and the second largest holder of US debt will have surpassed $100 billion... and continue climbing at a rate of about $30 billion per week. And it will not stop.
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Wake me up when it hits a quadrillion.
Quintillions in derivatives? We will all be billionaires!
Don't blink or you'll miss it.
I wish I could laugh at the insanity of this Ponzi scheme, but as most of us bought ticket when we were born, its not funny.
I'm just happy that my 2 year old will live a life of a serf. I mean, what's the issue with that as long as the top 1% can have a bigger yacht. Maybe they'll hire him to scrape the hull from time to time. There's always hope.
I hope my daughter turns out beautiful.. maybe she can land a top spot on the "American Bride" dating website that will be replacing the "Russian Bride" website..
I try not to be so doom and gloom. If you look at history, there are many examples of rising from the ashes. If the fundamentals are there, there will prosperity.
Agreed, which is why it's so doom and gloom. The fundamentals aren't there.
I really can not see this going on for that long...
Congratulations to all American Comrades!
"Fol heeth a jowee good fewow, foll heeth a jowy goowd fewow, fol heeth a jowee goood fewooooow, nobody can deniwah!" Sand Bawknee Fwank as Ben Shalom Bernanke glided across the checkerboarded floors oonto the pultpit. Ben grabbed the microphone. Thank you, to all my comrades who helped make this acusition profitable. Now as the Federal REserve, we own the US Government, and will continue to turn it over to the coprprate powers that be. Hopefully '11 will be better than '10."
Dodd, who was crying tears of joy, looked over his shoulder to Bawknee , "How can that be, well we can only hope." He stood up and clapped and the rest of the crowd followed.
"... how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?" Alan Greenspan, 12-05-1996
Those Fed guys are so smart.
The great thing is you can now buy even the one point dips on the eminis with no risk.
The NASDAQ and Russell 2000 seem to be in an almost uber-bubble right about now. They are truly being smoked higher.....it is unfortunately all going to end very, very badly however once this thing tops out.
Breaking News!!!! Its not going to end.
inflation is ultra low. What Ben is doing is working!
If the market actually feared Hyper-Inflation or Government default wouldn't Gold be shooting up to heaven?
It's not. It's topping :/
Ok,wait. You are the self proclaimed, "Not a troll", but here all you do is give an opinion. Inflation is not low but oil is at its highest level since the Fall of '08. Gold is topping? And you chart PM for fun, I presume?
Use facts and people will not assume you are here at the expense of functioning economic policy.
Ok, wait. You are the self proclaimed, "Not a troll", but here all you give are opinions. Inflation is not low because oil is at its highest level since the Fall of '08. Gold is topping? And you chart PM for fun, I presume?
Use facts and people will not assume you are here at the expense of a functioning economic policy.
you do realize gold is up almost 40% this year in dollar terms?
Come on man, food and energy are rising. All they do is tinker with the inputs and CPI & PPI reads what ever they want. What we all know is prices for food and energy are rising fast.
i somewhat understood the risks and benefits of china owning much of our debt. but now i am totally confused. what does it mean when the us owes trillions of dollars to itself? do we still really owe it to the rest of the world, or am i missing something?
First of all, we owe it to a bunch of central bankers, not ourselves. The Federal Reserve is NOT the United States. And, yeah, we still owe it to the bondholders, there's just more money to pay the bondholders. So, if you're a bondholder, who do you feel about that?
To find out more about the Imminent Collapse of the Global Economy, watch this video "Who Cares ~ What Could Possibly Go Wrong ??" at (http://www.youtube.com/watch?v=tTRxN73Iu5M).
by Anonymous
The United States economy is rotten at the core and has been stolen from the American people by the Wall Street Thieves that drove the Titanic into the iceberg in the first place!!
Do not underestimate Ben's ability to drive this market higher. He must hit 12000 Dow and 1300 S&P by years end. He must have this to maximize the animal spirits and wealth effect when people get their next quarters reports in the mail. The game is rigged. Say that 10 times and then place your long order. There is no risk. At this point Ben will not even allow world events to affect the market downward. Just as he secretly pumped trillions into offshore banks we will eventually find he is buying the futures to pump the markets up. It is his only option. FX and bonds are too big for him to have any effect for more than a few hours. What else can he do? Technicals are worthless. Price is all that matters. Go long young man, go long.
You guys just don’t get it.
The unwind is a free lunch. Treasury just defaults on the Fed. When you lend money to yourself you don’t actually expect to pay yourself back.
@bmfe
The Fed's balance sheet lists more than just treasuries.
I e-mailed this to my congressman today:
I urge you to support the bill "National Emergency Employment Defense Act of 2010" proposed by Congressman Kucinich. This bill would provide a stable monetary system for the future and effectively eliminate the current Federal Reserve System and replace it with constitutionally valid money and banking system. Unless we eliminate the present debt-based fractional reserve monetary system, our nation cannot hope to recover economically. The very fabric of the United States will be shredded by massive social unrest if the U.S. Dollar collapses. The present course cannot be sustained. For the sake of future generations of Americans, find the strength to stand up to Wall Street Banksters and the plutocracy behind them.
Please post your congressmans' automated email reply, thanking you for your support of the DREAM act, or DADT, or anything else not related to your actual concern.
+1. And "your [support|opposition] of gay marriage and [support|opposition] of adding a fourth meal to the federal school lunch program are at the core of my concerns as well."
I take it this is different from the report showing over $2 Trillion in new deficit (ending 30 September?)....
"The government's net operating cost, or deficit, in the report grew to $2.080 trillion for the year ended September 30 from $1.253 trillion the prior year as spending and liabilities increased for social programs. Actual and anticipated revenues were roughly unchanged."
http://www.reuters.com/article/idUSTRE6BK6WC20101221
I take it this is different from the report showing over $2 Trillion in new deficit (ending 30 September?)....
"The government's net operating cost, or deficit, in the report grew to $2.080 trillion for the year ended September 30 from $1.253 trillion the prior year as spending and liabilities increased for social programs. Actual and anticipated revenues were roughly unchanged."
http://www.reuters.com/article/idUSTRE6BK6WC20101221
I've said this many of times, what country or countries have the money to keep buying our bonds to the tune of 30 billion a week. If your a country that day in and day out can keep buying lets say 3 to 8 billion in bonds weekly, why do it when you could use that money to invest in other things that will give you a better rate of return. I know why the EU is doing it (anglo banking secret of debt financing, they can't get out without destroying a country), and also Japan (they where defeated and also where conned into this banking scheme to the point that they can't get out). China is doing it to get things from the US of value (technology, know how, and leverage), and the Oil producing countries in the middleeast like Saudi Arabia is doing it because of the deal made back inthe early 70's (but don't let that fool you, there's a reason why they are taking their time disclosing and back then why Saudi Arabia wanted it hidden). Saudi Arabia doesn't want it known how much they truly have in overseas banks and countries (local population don't like the Saud family anyway), and two Saudi Arabia is to far in and can't get their money out. There was some rumors that Saudi Arabia went to divest a chunk of their assets out of the US and it was rebuffed. They tried it also in the UK and they where literally threatened that if they tried it they would seize their assets as terrorists assets (remember 15 of the hijackers where from Saudi Arabi and they do have many extremest organizations in their country).
Sooner or later we will see hyperinflation in this country and when it happens the whole game will come apart.