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"In Feb 2013, Fed Will Buy 75% Of New 30y Treasury Supply"

Tyler Durden's picture




 

We urge readers to read the bolded section below, which comes straight from this quariter's Treasury Borrowing Advisory Committee (i.e., Primary Dealers) presentation to the Treasury Department, and explain, with a straight face, just how the Fed will ever be able to not only stop monetizing debt and injecting $85 billion of flow into the stock market, but actually sell any holdings.

Federal Reserve Holdings (1 of 2)

As of Dec 26, 2012 the Federal Reserve System Open Market Account (SOMA) held approximately $300 billion in 21+ year US Treasury debt

  • SOMA holds 41% of the 30y Treasury bonds issued since 2009
  • In Feb 2013, Fed will buy 75% of new 30y Treasury supply

Twist and QE operations have significantly lengthened the WAM of the Fed’s SOMA portfolio

The Fed currently owns 29% of all marketable 10yr Equivalents outstanding

Full TBAC presentation:

 

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Thu, 02/07/2013 - 16:44 | 3224048 Hedgetard55
Hedgetard55's picture

It's all good. No inflation here, nothing to see, move along.

Thu, 02/07/2013 - 16:45 | 3224052 trav777
trav777's picture

Goooooooooo Bernank!!!

Thu, 02/07/2013 - 16:48 | 3224055 TruthInSunshine
TruthInSunshine's picture

The Federal Reserve is going to "own" the United States pretty soon, at this rate.

Hey!....waaaaiiiit a minute.....

Thu, 02/07/2013 - 16:51 | 3224079 redpill
redpill's picture

The Fed should just buy all the debt.  Then we dissolve the Fed and our debt disappears.  Win!

Thu, 02/07/2013 - 16:53 | 3224093 Pladizow
Pladizow's picture

It only makes sence once you can accept the premis that the goal is to destroy the US without a bullet being shot!

Thu, 02/07/2013 - 16:57 | 3224112 Dealer
Dealer's picture

But just in case, the DHS has 1.6 billion rounds on order.

Thu, 02/07/2013 - 16:59 | 3224126 ShankyS
ShankyS's picture

And 7,000 new AR's! Hot damn!

Thu, 02/07/2013 - 17:09 | 3224152 camaro68ss
camaro68ss's picture

but dont worry, its for your safty and the safty of others around you. Now move along back to your FEMA camps

Thu, 02/07/2013 - 17:12 | 3224168 Cheesy Bastard
Cheesy Bastard's picture

Let me make this clear.  Buy guns.  And ammo.  All you can afford.  Now.

Thu, 02/07/2013 - 17:30 | 3224222 moonstears
moonstears's picture

Skip 22LR, rounds are all gone. Shotgun perhaps while 12GA ammo's available, still.

Thu, 02/07/2013 - 18:13 | 3224339 ZerOhead
ZerOhead's picture


NEW YORK | Thu Feb 7, 2013 1:40pm EST

(Reuters) - A Bangladeshi man pleaded guilty on Thursday to attempting to use a weapon of mass destruction in what authorities called a plot to blow up the New York Federal Reserve Bank. He faces up to life in prison under a plea agreement. The Federal Reserve is now considering to move it's headquarters to Tel Aviv, Israel, where superior security can thwart these joint Al Qaeda/ FBI plots. As an added bonus it will serve to decrease the ability of Washington to influence it's policy decisions to transfer all known wealth to banksters and G-ds Chosen People.

http://www.reuters.com/article/2013/02/07/us-usa-bomb-plea-idUSBRE9160EG...

Thu, 02/07/2013 - 18:24 | 3224367 fourchan
fourchan's picture

At what point of saddling the us tax payer with 20 trillion+ in debt

and every nonperforming asset the fed's banks created, become unAmerican?

Thu, 02/07/2013 - 19:14 | 3224480 Mr Pink
Mr Pink's picture

I saw that article on Yahoo earlier. I made a comment saying " he would have been doing americans a favor".

Umm...yeah...the sheep didn't like that much...

Thu, 02/07/2013 - 21:04 | 3224698 medium giraffe
medium giraffe's picture

Link?  Have to see this... :)

 

Edit:  Not to worry, found the story, will have a browse through.  I see from the first few comments  that they're a bloodthirsty lot though. Jeez, be careful in there Mr. Pink.  Groupthink fear turns to groupthink hatred on a dime in Yahooland it seems.

"Kill him slowly"

"Lifetime of prison rape"

So quick to advocate torture without a second thought.

Crivvens! 

Thu, 02/07/2013 - 22:55 | 3224945 TruthInSunshine
TruthInSunshine's picture

@Mr. Pink:

 

Entrapping Alphabet Federal Law Enforcement Nabs “Terrorist"

As a commenter on ZeroHedge notes of the incident (NOTE: to avoid black helicopters outside my window and to prevent any implications by Darth Vader like dressed law enforcement, I do not condone bombing or violence against others, that’s the job of the insane military industrial complex and their constant warmongering and drone strikes):

“Destroying the Federal Reserve would unleash the biggest wave of organic economic activity, robust real economic growth and true prosperity that Americans would ever experience; America would become the economic superpower to end all economic superpowers” – User TruthinSunshine, who is sarcastically referring to Mr. Nafis as a “dumbass”, assuming his motive was to destroy the US economy, and yes, TruthinSunshine isn’t buying the story or drinking the Kool Aid either.

Thu, 02/07/2013 - 23:52 | 3225078 Boozer
Boozer's picture

Scored 500 22lr's - $35 - 1 box per customer.

Also sniffed out sole remaining box of .223 at another store yesterday - $550! for 1k

Same ammo I bought for $350 one month ago.  Insane.

Thu, 02/07/2013 - 17:37 | 3224233 ThaBigPerm
ThaBigPerm's picture

Too late.  For anything remotely contemporary, that is.  You can still get some milsurp stuff, but even Mosins are getting thin and have about doubled in price.  Yugo M24/47 Mauser a good alternative; a bit more expensive but much higher quality and accuracy.  Still see a few tins of milsurp 7.62x54r and Privi 8mm Mauser still in stock.  .303 British still about as well.  Plus, you can still (for now) reload that stuff.  You can't even reload 9mm, .40, .223/5.56 these days (primers all gone as are most bullets).

Some modern bolt actions still in stock too, and as long as it's not .308/.223/22LR, etc, you can still feed it.  Shotguns hit and miss, but still can be found if you're not too picky.  Revolvers too.

SAVE YOUR BRASS!!!

Thu, 02/07/2013 - 17:52 | 3224284 Dr. Engali
Dr. Engali's picture

The lock down is accelerating that's for sure.

Thu, 02/07/2013 - 19:05 | 3224455 unrulian
unrulian's picture

you can find it...just look hard

Thu, 02/07/2013 - 17:15 | 3224177 insanelysane
insanelysane's picture

I love how my tax dollars are used to buy assault rifles for pissed off citizens in Egypt and Libya and Syria and......  But the same country arming citizens all around the world are working to stop their citizens from using their own money to buy weapons.

Thu, 02/07/2013 - 17:52 | 3224280 LongBalls
LongBalls's picture

CONSENT. Look it up people.

Thu, 02/07/2013 - 18:01 | 3224305 Orly
Orly's picture

"...in mute, nostril agony, carefully refined, then sealed over."

-Jimbo

Fri, 02/08/2013 - 00:56 | 3225191 floydian slip
floydian slip's picture

I touched her thigh and death smiled :)

Thu, 02/07/2013 - 21:57 | 3224840 Bansters-in-my-...
Bansters-in-my- feces's picture

LongBalls..... With an avatar like your last one and your user name,are you have spelled cuntscent correctly...?

Thu, 02/07/2013 - 19:05 | 3224454 unrulian
unrulian's picture

millions more when they start confiscating...they're easy to pry from cold dead hands

Thu, 02/07/2013 - 18:10 | 3224336 forwardho
forwardho's picture

There there, that wasn't so hard to swallow was it?

The truth is most often a bitter elixer.

Thu, 02/07/2013 - 18:32 | 3224378 JR
JR's picture

Exactly Pladizow. Fallen to date in America: housing, savings, jobs, traditional company pensions, private sector advancements for the working man,  monetary access to a higher education, the finest health care system worldwide, national borders, individual opportunity, world peace…  Next: liberty.

It’s one of two things; either these bankers are intentionally trying to close off American sovereignty in terms of taking control of the entire economy, or second, they are in a complete crisis situation whereby they’ve gone so far they can’t turn back. I rather believe that it doesn’t end with them in control; I don’t see that they’re going to be able to produce an economy that offers opportunity to a majority of American citizens.. If they are unable to produce a working economy, then they will eventually lose politically control.

Pladizow, are they so stupid that they don’t understand people who work for a living, who hope and dream for a better future, the entrepreneurs and the individuals and families and property owners and patriots; have they only learned just to take? They may think they can make this work without firing a bullet by holding ownership of everything - the industries and the buying power and the government - forcing people to work for less and less, forcing people to take an increasingly lower standard of living. You have to admit there have been a lot of educated people throughout the centuries who thought they could make communism and/or state control work.

Could these people think, therefore, that they can create a situation in America whereby they can have dictatorial control and force once-free willing Americans to work to support it?

If so, I can tell them it will work out much differently. People will tear up their paper and their ownership claims and their deeds of trusts and hang them from lamp posts – particularly the people who have tasted liberty.

Thu, 02/07/2013 - 17:11 | 3224144 rogeliokh
rogeliokh's picture

What "Exit"??? There is no Exit. FED is the only Elephant left in the room. To whom they are supposed to unload that bunch of crap they are buying now? To Aliens? Exit strategy my A$$! QE FOREVER! And 90%"Analysts" on CNBC believe that more they print/buy lower GOLD should drop, What those guys are smoking?

Thu, 02/07/2013 - 17:29 | 3224207 TruthInSunshine
TruthInSunshine's picture

It's very helpful that the Fed can buy as many tnotes as it wishes, as it has:

 

"...a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. [fiat] dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, [the Federal Reserve] can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined [Federal Reserve] can always generate higher spending and hence positive inflation."

Ben Bernanke on inflation, stealing, and robbery

Thu, 02/07/2013 - 18:28 | 3224376 eclectic syncretist
eclectic syncretist's picture

Hey Ben, you left out a word.  It should have been positive DEBT inflation,.....you FRN-humping Post-Hole Digging, Pizza-Hut Delivery gas-bagging moron.  How in the fucking hell is inflation going to help if no one has a job or spare cash to spend, you chrome-domed sackless piece of maggot shit?

http://www.youtube.com/watch?v=XvHFqcYN3nc

 

Thu, 02/07/2013 - 19:14 | 3224481 unrulian
unrulian's picture

kind of would make me want to...say...get my gold back...you know.......just in case...

cough...germany...cough

Thu, 02/07/2013 - 21:25 | 3224773 Seer
Seer's picture

This is what I've been saying for a long time now.  I think that at the very least we should explore how this could happen and what would be the consequences of it if it were to occur.  Yes, I'm serious.

Thu, 02/07/2013 - 16:52 | 3224088 LawsofPhysics
LawsofPhysics's picture

For the tenant of the corporation of the united states it will soon be impossible to pay back any debt on physical assets (by design) when the currency dies.  I think many are waiting (hoping) that someone from the Fed shows up.  When fraud is the status quo, possession is the law.

The only complementary assets now are gold and lead.

Thu, 02/07/2013 - 17:00 | 3224127 Everybodys All ...
Everybodys All American's picture

What about food and water. Seeds to grow the food. Prepare for the worst.

Thu, 02/07/2013 - 17:35 | 3224234 CH1
CH1's picture

Top of the list: Good neighbors, good friends, people you trust.

Thu, 02/07/2013 - 18:04 | 3224317 Orly
Orly's picture

Good fences make good neighbors.

-Frost

Thu, 02/07/2013 - 19:17 | 3224485 unrulian
unrulian's picture

try and protect that food till harvest...gl

Thu, 02/07/2013 - 22:13 | 3224871 Dieselclam
Dieselclam's picture

I have long believed that the treasuries purchased by the fed are backed by the gold in Fort Knox and what is stored in the NY Fed where posession is 100% of the law.
Gold backed currency. What a concept.

Thu, 02/07/2013 - 18:02 | 3224306 Ying-Yang
Ying-Yang's picture

"In Feb 2013, Fed Will Buy 75% Of New 30y Treasury Supply"

Fucking Unbelievable a short time ago!

And to remind us.......

In total, $1.25 trillion in agency MBS were purchased between January 2009 and March 2010

Thu, 02/07/2013 - 17:21 | 3224193 Ruffcut
Ruffcut's picture

So fucking what?

The fedsterbitchezz have displayed they can buy this shit all day, all month and til someone says they can't.

WHo's stopping them?

ANd who in the fuck is going to buy this bag o shit, if they don't? Mighty fucking mouse?

"here I cum to save my day!!!"

 

Thu, 02/07/2013 - 21:29 | 3224778 Seer
Seer's picture

The repercussions are that folks exporting to the US will DEMAND to be paid in something other than USD.  Care to discuss what that might be?

Oil/energy is going to become far less affordable for the average U.S. citizen.

Thu, 02/07/2013 - 17:23 | 3224203 Liquid Courage
Liquid Courage's picture

Good thing there's an "Office of Debt Management", or things could get ... you know ... out of hand.

Thu, 02/07/2013 - 19:45 | 3224539 bobthehorse
bobthehorse's picture

If you print a trillion dollars and throw it in a black hole of debt, how much money has actually been created?

That's why we aren't seeing inflation.

There's no velocity.

http://www.angrysinner.blogspot.kr/2013/02/thursday_7.html

Thu, 02/07/2013 - 21:35 | 3224789 Seer
Seer's picture

Inflation will be sent back to the US from abroad.

It's ultimately about affordability.  I could state that price inflation is coming and is amplified for those who lose jobs; enough of this occurs and we'll see a complete breakdown in confidence in the USD (enter hyperinflation).

Thu, 02/07/2013 - 16:44 | 3224049 papaswamp
papaswamp's picture

WTF Bitchez?

Thu, 02/07/2013 - 17:06 | 3224142 Dr. Richard Head
Dr. Richard Head's picture

The Federal Reserve - Donkey punching the economy since 1913.

Thu, 02/07/2013 - 16:44 | 3224050 Hedgetard55
Hedgetard55's picture

Ben: "We are NOT monetizing the debt".

Thu, 02/07/2013 - 16:45 | 3224051 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Slackers!

Who's kidding whom, buy it all!

Thu, 02/07/2013 - 16:48 | 3224054 EmmittFitzhume
EmmittFitzhume's picture

Nobody else will buy that shit(?)

Thu, 02/07/2013 - 16:47 | 3224059 LawsofPhysics
LawsofPhysics's picture

Massive capital mis-allocation and mal-investment.  Amazing that the world continues to let these "entitled" few continue to collect interest on bogus debt.  Boom motherfuckers.

Thu, 02/07/2013 - 16:48 | 3224065 NoDebt
NoDebt's picture

That's why they call it a "Liquidity Trap".  Very difficult to stop once you start.  Also known as "addiction to printing money."

 

Thu, 02/07/2013 - 16:57 | 3224113 Meat Hammer
Meat Hammer's picture

When the only money you have is debt you can't pay off your debt because you would have no money.  

Except for gold and silver.

Thu, 02/07/2013 - 21:38 | 3224795 Seer
Seer's picture

Yup!  It was ALWAYS a road to hell.  And now that the growth music has stopped there will be a huge shortage of chairs available.

Thu, 02/07/2013 - 16:48 | 3224068 vote_libertaria...
vote_libertarian_party's picture

How odd.  I thought everything was smooth sailing and hunky doorey.

Thu, 02/07/2013 - 16:49 | 3224069 Water Is Wet
Water Is Wet's picture

Take that BOND VIGILANTES!  Go Fuck Yourselves!  lololololol

Sincerely,

Twat Bernank

Thu, 02/07/2013 - 16:49 | 3224070 dbTX
dbTX's picture

A Spring time of recovery. Can we get Paul Voulker back on the job?

Thu, 02/07/2013 - 17:25 | 3224204 Liquid Courage
Liquid Courage's picture

Think he'd take it?

Wanna bet?

Thu, 02/07/2013 - 16:49 | 3224071 Bagbalm
Bagbalm's picture

Call us the boot-strap nation.

Thu, 02/07/2013 - 16:50 | 3224075 Racer
Racer's picture

Okay so let me see... I am going to print Bank of Racer notes and then I will buy most of them myself..

Hmmmmm.....

????????

Uh, no I will do no such thing because it is bad and very stupid

Thu, 02/07/2013 - 17:26 | 3224210 Liquid Courage
Liquid Courage's picture

And you'd be arrested for fraud if you tried it.

Thu, 02/07/2013 - 16:50 | 3224077 debtor of last ...
debtor of last resort's picture

So stop calling it "debt".

Thu, 02/07/2013 - 17:04 | 3224135 Everybodys All ...
Everybodys All American's picture

Don't call it taxes either, rather call it revenue. Don't call it spending, rather call it an investment. Such is the case under the Marxist mob serving Obama. Welcome to the world of make believe America. I already know how this ends.

Thu, 02/07/2013 - 18:04 | 3224318 Ying-Yang
Ying-Yang's picture

Don't call it debt... call it a buying opportunity.

Thu, 02/07/2013 - 16:51 | 3224081 Downtoolong
Downtoolong's picture

I think it's interesting that the latest QE has the Fed monetizing both Treasury's and MBS. Like two peas in a pod. That should tell you something about the new risk profile of Treasury's. And the Fed is paying up through the nose for both.  

Thu, 02/07/2013 - 16:51 | 3224084 jomama
jomama's picture

the show must go on.

Thu, 02/07/2013 - 16:52 | 3224086 MedTechEntrepreneur
MedTechEntrepreneur's picture

There should be a law forbidding the FED from buying more than 20% of TB's.... This is just an extension of executive and congressional profligate theft.

Thu, 02/07/2013 - 16:54 | 3224101 LawsofPhysics
LawsofPhysics's picture

There was, it was changed sometime before Glass-Stegall.  Can't remember the legislation, for me, the loss of Glass Stegall was the sign to buy any and all physical I could.

Thu, 02/07/2013 - 17:19 | 3224185 hannah
hannah's picture

"there should be a law against the fed...'

 

fixed it for ya...

Thu, 02/07/2013 - 18:29 | 3224382 Poor Grogman
Poor Grogman's picture

There is..
It's called the constitution.

Fri, 02/08/2013 - 13:02 | 3226147 hannah
hannah's picture

what is this 'constitution' you speaketh of...? is it 2-ply or 4-ply paper...?

Thu, 02/07/2013 - 16:54 | 3224096 thismarketisrigged
thismarketisrigged's picture

fuck the fed.

 

thomas lee from jpm was on cnbc and he said we are in a bull market and that ppl should go long stocks. this fucker does not even mention how its 100 percent due to the fed, prob leading ppl to believe economy is improving.

 

fuck u lee, hope u and ur fradulant bank get hammered during next crash

Thu, 02/07/2013 - 16:54 | 3224097 news printer
news printer's picture
At Vaux, France - workers threaten to blow foundry

168 employees of the foundry DMI de Vaux, in Allier, have disposed gas cylinders throughout the factory and now threaten to blow it up.

Thu, 02/07/2013 - 17:09 | 3224140 HoaX
HoaX's picture

At least the French know how to put their balls to the wall (potentially literal in this case).

No offense to you guys, but you´re fuckin sheeple.

 

Thu, 02/07/2013 - 17:21 | 3224186 moonstears
moonstears's picture

Seems the French need to conscript foundry workers into their military, they'd be a damn force to be reckoned with, having these ballsy fuckers in uniform.

Thu, 02/07/2013 - 17:23 | 3224196 HoaX
HoaX's picture

lol, they do have the Foreign legion.

http://answers.yahoo.com/question/index?qid=20110512132314AA0kUCo

Keep downvoting me mates, that will make you feel better. Truly taking a stand you armchair warriors!

Thu, 02/07/2013 - 17:34 | 3224232 earleflorida
earleflorida's picture

what's a 'maginot line got to do with it?

i want a moar... built through it?!

Thu, 02/07/2013 - 17:49 | 3224247 HoaX
HoaX's picture

Seem like I´m done for now. Pissed you lot off enough for the moment it seems. t(´-´t)

Too easy tho, way too easy.

Btw, keep printing, that will solve it. Almost as much as crying here about the problem for the past 5 years without doing jack shit about it does, or whining about your gold not hitting $1700+

Thu, 02/07/2013 - 18:21 | 3224360 Harbanger
Harbanger's picture

It's very hard to take you seriously with those french dance moves.

Thu, 02/07/2013 - 18:28 | 3224375 HoaX
HoaX's picture

It´s Rick Astley bitch.

Rick Astley - Never Gonna Give You Up - YouTube

Know your classics.

Thu, 02/07/2013 - 18:32 | 3224391 Harbanger
Harbanger's picture

Rick Astley is your idea of classics? You're fckin gayer than I thought.

Thu, 02/07/2013 - 18:40 | 3224398 HoaX
HoaX's picture

Just fuck off will ya.

Btw, your avi makes you look like a fuckin pedo.

What goes around comes around. Least mine knows how to dance.

Stop the avi kiddy abuse.

Thu, 02/07/2013 - 18:43 | 3224410 Harbanger
Harbanger's picture

That's my son when he was 5.  He already had bigger balls than you, frenchie.

Thu, 02/07/2013 - 19:12 | 3224414 HoaX
HoaX's picture

Why even defend yourself?

Got something to hide?

He already had bigger balls than you

Spare me the details plx you perv.

 

http://www.youtube.com/watch?v=FONN-0uoTHI

Boy, that escalated quickly!

Thu, 02/07/2013 - 18:57 | 3224434 jomama
jomama's picture

if you meet five assholes in one day, you're probably the asshole.

Thu, 02/07/2013 - 17:21 | 3224190 hannah
hannah's picture

those frenchies are DAMN smart. instead of taking over the factory and kicking the owners out, lets blow it up instead. real smart those frenchies....

Thu, 02/07/2013 - 17:50 | 3224217 HoaX
HoaX's picture

And please tell me, what did you Americans do so far?

Least Europeans know how to send their governments a proper message.

You Americans are a joke, and pissing you off tonight is fuckin hilarious XD

Here´s a nice Russian song to cheer you bitches up a bit :

http://www.youtube.com/watch?v=sTSA_sWGM44

Thu, 02/07/2013 - 18:50 | 3224422 Major Malfunction
Major Malfunction's picture

Trololo!!!  Eduard Khil FTW!  That 1976 vid is simply priceless. 

 

Even though Eduard passed away last year, he will now live on forever.

Thu, 02/07/2013 - 18:52 | 3224428 HoaX
HoaX's picture

Least someone got a sense of humor, phew!

Thu, 02/07/2013 - 17:28 | 3224212 earleflorida
earleflorida's picture

please... have sum moar hollanddaise'd sauce on your kraut'd sandwich, won't U`

Thu, 02/07/2013 - 18:08 | 3224296 HoaX
HoaX's picture

How´s your pink slime burger tasting tonight?

Even if you guys wanted to raise a proper insurrection, most of you are too fat to be able to climb out of your Mom sponsored mancave without getting a cardiac arrest.

Thu, 02/07/2013 - 20:20 | 3224622 Fredo Corleone
Fredo Corleone's picture

HoaX !

Speaking of burgers, what the Devil are the Irish doing: selling Polish horse meat to John Bull in Tescos throughout the kingdom ? Quite the controversy...

http://www.dailymotion.com/video/x1mdgg_prince-controversy_music#.URRElB...

Thu, 02/07/2013 - 16:57 | 3224103 NEOSERF
NEOSERF's picture

So the US this month will buy 75% of our own long term debt, Japan apparently has to buy almost 100% of its debt...nobody except hedge funds wants anything but Southern European debt, Russia is selling US debt and that leaves China...WTF happens if they actually stop buying everyone's debt?  How in God's name do you stop this carousel?  In the past, everyone buying eachother's debt at least gave the illusion of the debt being desired and having value.  No more.  Pretty clear no one wants to buy anything with dates beyond 3 years and therefore no one gets any yield...man is this screwed up.

Thu, 02/07/2013 - 17:17 | 3224162 HoaX
HoaX's picture

Hedge funds buying European debt should tell you something about the profitability and chance of getting paid back. Do they buy US debt?

China stopped buying yours, and they´re swimming in dollars cuz of all the iCrap they make. They buying PM´s now.

And for some nice watching if you haven´t yet cuz it´s somewhat old:

Overdraft

http://www.youtube.com/watch?v=MqW628w_z4w

The truth hurts.

Thu, 02/07/2013 - 17:30 | 3224221 Temporalist
Temporalist's picture

I think, as Hugh Hendry pointed out, China is stuck having to purchase US debt because if they stop they are stabbing themselves in the back as the RMB will appreciate, they won't be able to export anything and they will kill their manufacturing base.  This might change when their growing middle class becomes self-sustaining but they aren't there just yet.

Thu, 02/07/2013 - 17:47 | 3224271 HoaX
HoaX's picture

Right, it´s totally not like they´re planning to run the worlds reserve currency for the next decade or so.

Thu, 02/07/2013 - 18:29 | 3224379 Harbanger
Harbanger's picture

They're just on board with the globalist plan, but they won't be running anything.

Thu, 02/07/2013 - 18:45 | 3224413 HoaX
HoaX's picture

Keep dreaming "kiddo".

Thu, 02/07/2013 - 17:32 | 3224228 Liquid Courage
Liquid Courage's picture

How in God's name do you stop this carousel?

 

"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."

- Ludwig von Mises

Thu, 02/07/2013 - 16:56 | 3224106 thismarketisrigged
thismarketisrigged's picture

just so i can laugh at the fixation of this market, i hope they bring the s&p positive for the day. it would be too funny not to laugh

Thu, 02/07/2013 - 16:58 | 3224118 optimator
optimator's picture

Just half the usual pomo today so It'll have to finish a little red.

Thu, 02/07/2013 - 16:56 | 3224109 optimator
optimator's picture

What's the big deal.  My wife pays off my credit card with her credit card checks.  Works well for us.  I can't see any problems in the future coming up.

Thu, 02/07/2013 - 16:57 | 3224115 Kreditanstalt
Kreditanstalt's picture

Tell me this: Why do they ever have to sell anything?  They don't. 

Thu, 02/07/2013 - 17:20 | 3224188 kaiserhoff
kaiserhoff's picture

Because someday something big will break.  On the other hand, if Ben bails California, all bets are off.

To the moon, Alice.

Thu, 02/07/2013 - 17:36 | 3224240 Bob Sacamano
Bob Sacamano's picture

Correct - they do not have to sell. 

They do not have to worry about "losing" money or wiping out their "equity" -- these concepts are foreign to an entity that can create money out of thin air at will.  They live in a limitless world.  

Thu, 02/07/2013 - 17:47 | 3224244 Ham-bone
Ham-bone's picture

That's really the right question - SO WHAT?  So the Fed buys 70% of every government debt instrument down to 5yrs or 3yrs or eventually 1yr.  Fed is the market.  SO WHAT?

So long as there is massive unemployment via continuing offshoring, lessening demand, technology, automation, robotization, etc. the lack of any wage inflation coupled w/ ever slowing GDP will allow Fed to continue saying "inflation is low".  Such stagflationary forces at work here and globally due to oversupply, overpopulation, overindebtedness...so what stops the Fed and CB's from playing this co-ordinated game indefinitely???

The case for PM's is quite clear but not so sure the end is near for the Fed, for the dollar, for the lying sons of bitchs in charge???

Fri, 02/08/2013 - 00:07 | 3225115 Liquid Courage
Liquid Courage's picture

Limits? Maybe when a cereal box is so small you can slip it into your shirt pocket a few sheeple might start grab a clue.

 

Quality (Quantity) Dilution ... there's yer Limit.

Thu, 02/07/2013 - 16:57 | 3224116 philosophers bone
philosophers bone's picture

When they are done QE'ing, they will create new security with a fancy name (U.S. Patriot Secure Trust Fund?), the Fed will transfer all of their over-price, low interest rate bonds into it and the federal government / primary dealers will stuff a bunch of it down the throat of pension funds / individuals in exchange for any cash that sitting around in those accounts.  Then interest rates go up, the value of U.S. Patriot Secure Trust Fund goes down and that stage of the ongoing theft will be complete.  What other sceanario is there?  How can Fed allow interest rates to go up (thereby tanking value of the bonds they hold) before they unload them.  I'd be interested in knowing others' scenarios.

Thu, 02/07/2013 - 17:28 | 3224216 seek
seek's picture

My scenario: ZIRP forever until the US defaults, breaks apart into smaller countries, or the revolution begins.

Once that happens, debt is zeroed out and we start over.

Thu, 02/07/2013 - 18:44 | 3224411 Poor Grogman
Poor Grogman's picture

How about this one.

Controlled deflation just like Japan with the fed pouring money into the bucket just fast enough to keep the water level going down slowly, as all the debt in the system sucks up the money.

Inflation in hard assets as cash finds a home, with a special boost for anything oil intensive, and the rest desperately trying to deleverage. ( with mixed success).

Massive growth of the state as government spending becomes one of the only source of those much needed USD.

No exit plan for the fed ( it owns most stuff eventually)

This is not a unicorns and rainbows ending I know, but if left UNCHALLENGED I'm afraid that's what we might be stuck with...

Thu, 02/07/2013 - 21:52 | 3224828 Seer
Seer's picture

Excellent call.

War bonds.

There's still plenty of anti-commie folks out there (and a trunk load of propaganda and linked memories) such that they can conjure up the ultimate villain - China.  Suspect the Japanese vs. Chinese stuff going on right now is kind of the warm-up to get people thinking about "China Bad!"

Thu, 02/07/2013 - 17:02 | 3224129 lasvegaspersona
lasvegaspersona's picture

So we can has some too?

Thu, 02/07/2013 - 17:04 | 3224132 Kai
Kai's picture

Might as well get on with it.  Someone make an app that tells you what % of America's total assets is held on the Fed balance sheet.

I want to know when the money printers own more than 10% of my country outright.

Thu, 02/07/2013 - 17:04 | 3224134 JJ McApe
JJ McApe's picture

Well, it could be worse...

  • In Feb 2013, Fed will buy 75% of new 30y Treasury supply
  • In Feb 2014, Fed will buy 100% of new 30y Treasury supply
  • ?

    ?LOOOOOOOOOOOOL

     

    Thu, 02/07/2013 - 17:05 | 3224139 Motorhead
    Motorhead's picture

    I love it...the Office of Debt Mgmt...they must be some busy mother fuckers at that office.

    Thu, 02/07/2013 - 17:17 | 3224150 ebworthen
    ebworthen's picture

    Tyler(s) asked:

    "...explain, with a straight face, just how the Fed will ever be able to not only stop monetizing debt and injecting $85 billion of flow into the stock market, but actually sell any holdings."

    Dear Taxpayer,

    The Treasury Department is pleased to tell you that your entire (IRA/401K/Pension) has been converted into a blend of 1, 10, and 30 year Treasury Patriot Bonds backed by the full faith and credit of the U.S. Government.

    You will have access to the FULL amount of your investment in our great nation when you reach age 70 or die (whichever comes first). 

    Be aware that if you die any proceeds to spouse, children, or designated recipients will be taxed at 59% and any capital gains since this conversion occurred at a rate of 25%.

    The FED will set the Treasury Patriot Bond rates, but be assured that it will be at least equal to the Revised Chained Cost of Living Allowance (RC-COLA) of Social Security.

    Withdrawals from your funds can only be taken in apportionment with your life expectancy.  For example, if you are a male aged 70 and average life expectancy is 86, you may withdraw 1/16th of your holdings per year and only in monthly installments and no lump sum withdrawals are allowed.

    In times of national crisis, your withdrawals my revert to the 1/32nd's or 1/64th's rule of apportionment, however, we do not foresee this occurring at the present time.

    We hope you appreciate the necessity of this conversion, and thank you in advance for your patriotism and commitment to restore the nation and support liberty.

    Regards,
    Jon Corzine
    Treasury Secretary

    Thu, 02/07/2013 - 17:27 | 3224205 RebelDevil
    RebelDevil's picture

    I've heard that before. My question is - How will they raid the retirement funds? Executive order? 

    Thu, 02/07/2013 - 18:23 | 3224357 ebworthen
    ebworthen's picture

     

     

    "Dear Mr. RebelDevil,

    What 'raid' of retirement funds do you speak of?

    It is your money, the Treasury Department is merely safeguarding it from the vagaries of the markets and the uncertainties of our times by converting it to Treasury Patriot Bonds.

    For laws pertaining to this conversion please refer to the Patriot Act, the National Defense Authorization Act (N.D.A.A.), KELO vs. City of New London, and Executive Order 6102.

    Regards,
    The Honorable Jon Corzine
    Department of the Treasury"

    Thu, 02/07/2013 - 17:26 | 3224208 Au_Ag_CuPbCu
    Au_Ag_CuPbCu's picture

    +100, Jon Corzine as Treasury Secretary was a real nice touch LOL!

    Thu, 02/07/2013 - 17:36 | 3224239 John Law Lives
    John Law Lives's picture

    Excellent!  Good stuff.

    By then, the Treasury Secretary might as well be called the Wealth Confiscation Czar.

    Thu, 02/07/2013 - 21:55 | 3224838 Seer
    Seer's picture

    It's always some nice sounding name, "confiscation" isn't nice...  Try: Wealth Protection Czar.  Remember, it's ALL about "protecting" us!  Big Brother is just the bomb!

    Thu, 02/07/2013 - 17:43 | 3224257 Dr. Engali
    Dr. Engali's picture

    + 1 That post needs to go in the archives. Well done.

    Thu, 02/07/2013 - 22:12 | 3224863 goldenbuddha454
    goldenbuddha454's picture

    That is the most accurate and best forward-looking statement I've ever seen.

    Thu, 02/07/2013 - 17:09 | 3224155 giggler123
    giggler123's picture

    Anyone else Fed up?

    Thu, 02/07/2013 - 17:17 | 3224181 Motorhead
    Motorhead's picture

    Every day, all day.

    Thu, 02/07/2013 - 17:11 | 3224164 Hedgetard55
    Hedgetard55's picture

    FED gains/losses are nominal, not real. If they print a trillion bucks and buy bonds with it, they then lose 50% in value, who really loses? Not the FED, they have 500 billion more than they started with. It is the currency debasement that pays for all this bullshit.

    Thu, 02/07/2013 - 17:12 | 3224167 Undecided
    Undecided's picture

    doesn't the fed's charter expire this month?

    Thu, 02/07/2013 - 17:21 | 3224192 Seasmoke
    Seasmoke's picture

    that is what i have been wondering as well ??????

    Thu, 02/07/2013 - 17:39 | 3224229 Dr. Engali
    Dr. Engali's picture

    The fed does not have a charter that end. I repeat the fed does not have a charter that ends. When the federal reserve was enacted it was a 20 year charter. In 1927 The original Charter was amended To read "To have succession after February 25, 1927, until dissolved by Act of Congress or until forfeiture of franchise for violation of law." This means the 20 years never ran out it should have ran out in 1933, this is due to the fact that the first two Federal banks of the United states ran out due to charters not being renewed.

    Thu, 02/07/2013 - 17:52 | 3224281 forwardho
    forwardho's picture

    until forfeiture of franchise for violation of law.

    So, is it still illegal to destroy U.S. currency.

    I was under the impression there was a law to that effect, no?

    Thu, 02/07/2013 - 17:58 | 3224302 Dr. Engali
    Dr. Engali's picture

    Well we have seen the largest pillaging of wealth happen before our very eyes since 2008 and nobody held accountable, so my guess is that laws don't apply at this point in time... except for to you and me.

    Thu, 02/07/2013 - 19:18 | 3224491 Major Malfunction
    Major Malfunction's picture

    Indeed.  One of Obama's PERSONAL Executive Orders (# 1337, code-named NANNY-NANNY-BOO-BOO) declares, "I'm rubber, and you're glue - what bounces off of me, will stick to you. Sooo ... sucks to be you, Bitchez!!"

     

    It is highly, highly unfortunate when basic words that form one's language inexplicably lose their meaning.  Like "law".  "Law" used to mean something. "Breaking the law" used to get a person in trouble.

    And the punch line?? This 'Obama' -- before becoming Chief Apologist of the USA -- was a practicing attorney and a University of Chicago Law School lecturer that taught constitutional law.  Boggles. The. Mind.

     

    Thu, 02/07/2013 - 21:59 | 3224847 Seer
    Seer's picture

    Apparently you're a youngster.  This shit has been going on for a LONG time.  The Puppet Masters have existed since the hierarchical structure came to be...

    Thu, 02/07/2013 - 17:16 | 3224175 akarc
    akarc's picture

    Let me see. 

    Im gonna make a product that has value and sell it. But then because it has so much value Im gonna buy 75% of it. Which makes me wonder? Why am I gonna sell the 75% I want back or don't want to sell to begin with.  Is this analgous to a product recall? Is my product defective? Am I just floating some sales to see if their is a market? 

    I'M SO FUCKING CONFUSED?????? I don't understand, it's non-sensical, I see your 75% and raise you Chinas holdings???  Help meeeeeeeeeeeeeeeeee Jesus........... wheres Kai and  his axe? Come on Toto we ain't in somewhere no more.

    Thu, 02/07/2013 - 17:36 | 3224235 Hedgetard55
    Hedgetard55's picture

    You could buy your own product back if you could print your own money, otherwise you are correct, it is nonsensical. As it is, someone IS buying the crap treasuries and MBS, and it ain't the FED, it is the holders of dollars. They are the true buyers, through purchasing power debasement.

    Thu, 02/07/2013 - 17:15 | 3224176 Silverhog
    Silverhog's picture

    So I want to know who the other 25% shitheads are. 

    Thu, 02/07/2013 - 17:15 | 3224178 Bansters-in-my-...
    Bansters-in-my- feces's picture

    Is that not a criminal act...?

    See...crime pays.

    Thu, 02/07/2013 - 17:17 | 3224182 youngman
    youngman's picture

    I feel sorry for the idiots buying the other 25%...what the hell are they thinking

    Thu, 02/07/2013 - 17:20 | 3224187 Tsar Pointless
    Tsar Pointless's picture

    "Gee! So I'll buy this crap paper today, and then tomorrow, I'll flip it to my buddies at the Fed, who will buy it for a higher price, and I will be RICH RICH RICH!"

    That's what they're thinking.

    Thu, 02/07/2013 - 17:50 | 3224277 hairball48
    hairball48's picture

    Regarding the 25%... Sheeples think?

    Thu, 02/07/2013 - 17:22 | 3224195 Yen Cross
    Yen Cross's picture

     Unfortunately, I might still be around in 30 years when those ass wipes mature.

    Thu, 02/07/2013 - 17:27 | 3224213 Seasmoke
    Seasmoke's picture

    Hotel California.......All exits have been locked

    Thu, 02/07/2013 - 17:33 | 3224227 madcows
    madcows's picture

    they stab it with their steely knives but they just can't kill the beast.

    Thu, 02/07/2013 - 17:40 | 3224252 Tsar Pointless
    Tsar Pointless's picture

    Trivia: The word "steely" was a reference to another classic '70s group, Steely Dan.

    For those who didn't already know.

    Thu, 02/07/2013 - 17:46 | 3224264 forwardho
    forwardho's picture

    True?

    The esoteric information available here at ZH is vast.

     

    Thu, 02/07/2013 - 18:14 | 3224342 Mr Pink
    Mr Pink's picture

    I actually did know that. Apparently the 2 bands didn't care much for one another. I myself always preferred Steely Dan

    Thu, 02/07/2013 - 19:27 | 3224507 Major Malfunction
    Major Malfunction's picture

    More Trivia:  DID YOU KNOW?? Being fans of Beat Generation literature, Fagen and Becker named the band after "Steely Dan III from Yokohama", a strap-on dildo referred to in the William S. Burroughs novel Naked Lunch.

    Thu, 02/07/2013 - 17:28 | 3224218 Westcoastliberal
    Westcoastliberal's picture

    It's a snake eating it's own tail.  Can't last forever.

    Thu, 02/07/2013 - 17:42 | 3224254 forwardho
    forwardho's picture

    With infinite paper fiat one can purchase paper infinitely.

     

    Thu, 02/07/2013 - 17:32 | 3224226 madcows
    madcows's picture

    Which leads to the question, What idiot(s) is buying the other 25%?

    Thu, 02/07/2013 - 18:14 | 3224341 Walt D.
    Walt D.'s picture

    LOL

    Do NOT follow this link or you will be banned from the site!