This page has been archived and commenting is disabled.
Chart Of The Day: The Fed Now Owns One Third Of The Entire US Bond Market
The most important chart that nobody at the Fed seems to pay any attention to, and certainly none of the economists who urge the Fed to accelerate its monetization of Treasury paper, is shown below: it shows the Fed's total holdings of the entire bond market expressed in 10 Year equivalents (because as a reminder to the Krugmans and Bullards of the world a 3 Year is not the same as a 30 Year). As we, and the TBAC, have been pounding the table over the past year (here, here and here as a sample), the amount of securities that the Fed can absorb without crushing the liquidity in the "deepest" bond market in the world is rapidly declining, and specifically now that the Fed has refused to taper, it is absorbing over 0.3% of all Ten Year Equivalents, also known as "High Quality Collateral", from the private sector every week. The total number as per the most recent weekly update is now a whopping 33.18%, up from 32.85% the week before. Or, said otherwise, the Fed now owns a third of the entire US bond market.
At this pace, assuming Janet Yellen keeps delaying the taper again and again over fears of how "tighter" financial conditions would get, even as gross US bond issuance declines in line with the decline in deficit funding needs, the Fed will own just shy of half the entire bond market on December 31, 2014... and all of it some time in 2018.
Source: Stone McCarthy
»
- 40967 reads
- Printer-friendly version
- Send to friend
- advertisements -
Any sufficiently advanced technology is indistinguishable from magic. - Arthur Clarke
Cannon fodder eh?
By your name and words shall you be known.
Educated, with a good working knowledge of history and finance.
A bell cannot be unrung , once awakened to the fantasy of "the Economy" The blissful sleep of ignorance is forever banished.
A bell cannot be unrung , once awakened to the fantasy of "the Economy" The blissful sleep of ignorance is forever banished.
i wish it to be the case. i know so many people who are aware of the truth but refuse to believe it. they just can't wrap their heads around conspiracy of such scale. they get mad when confronted with reality though often i can detect genuine fear behind it.
Compaired to global coordinated central banking, 9/11 conspiracy is a children's bedtime story.
I just watched an interview with Ellen Brown from the Web-of-Debt blog. If I got it right, she says the Fed can own all of the debt. It would only be a problem on paper.
They can own all of the debt, all of the stocks and all of the assets. That assumes people are stupid enough to trade their assets for worthless pieces of paper
Though I never underestimate the stupidity of my fellow humans
It all works until it doesn't any longer.
Isn't that how they test for insanity? They turn on the tap and tell you to mop up the water. If you turn off the tap first before you start mopping, you're healthy. If not.....
I think it's time the Fed put the mop down
Daddy Bernanke and Mommy Yellen telling POTUS INCREASE THE DAMN DEFICIT!!!!!!!!!
What a sick country. In 1946, America was the greatest country in the world. I think somewhere between 1964 and 1971. When Nixon broke the gold link, America admitted the government had over-leveraged its economy. Since 1971, America lived off its savings and then its credit based on its history (1946 - ????) as the greatest country in the world.
I wish one American politician had the balls to state the truth: "America is the Greatest Debtor Nation in the World".
And the commissions keep rolling... and why audit the FED? Lets not forget Corzine and MF was on the list... Just exactly who is going to throw the money changers in prison?
Primay dealers
Bank of Nova Scotia, New York Agency
BMO Capital Markets Corp.
BNP Paribas Securities Corp.
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies LLC
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Mizuho Securities USA Inc.
Morgan Stanley & Co. LLC
Nomura Securities International, Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
SG Americas Securities, LLC
UBS Securities LLC.
LOL. When it reaches fifty percent, is America a Soviet plutocracy?
Wait until Janet puts the strapon and goes full taper! Why would she want to continue with Bernanks drunkfest? The longer it drags on the longer she will be liable holding his bag of shy..t
I have seen some really ugly bull dikes slamming away with a strapon but Old Yellen would kill an orgasim for a blind lesbian.
In other words, "We (US Government) don't need your money, we're just going to print whatever we need."
It's easy to see where this is heading. Look forward to the full command economy when government is the only game in town. There is only one direction to this. What it looks like when we get there is anybody's guess.
Ben said "We will not monetize the debt" and I believe him, so this post cannot be right.
The chart shows that effectively the domestic Treasury market is evaporating. The buyers are the Fed and foreign sovereign funds and institutions. Like others, I see weird logic in this trend. The interests of the Fed in relation to its vast bond holdings must converge with the interests of these foreign institutions. It's as if the Fed is becoming a foreign body--not in the sense of its innate hostility to the people--but literally.
This has political implications.
It represents our broken system. Financially it's broken since the newly printed Cash stays on the Banks balance sheets and not into the overall Economy. Second it's broken politically with a con-gress unable to control spending or even talk about the issue. Serving the interests of a few Oligarchs and not the citizens, the FF's are rolling in their graves as TJ warned about private banking....as many here on ZH know the Fed is the problem not the solutuion.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies..
System was broken intentionally to overthrown the govt. Debt slaves to a country at multiple war fronts with suboptimal tax revenue and tax breaks for the only people with any cash in a jobless economy is what you have. Fire sale is next. Taxed into poverty is as well.
All for the common good of the banksters.
The banksters tell the small people socializing losses and privatizing profits, or stealing wealth is good for the citizens.
Here's a pretty good indicator of where we are with the 'Hope and Change' economy.
How bout those black thursdays and fridays!
http://research.stlouisfed.org/fred2/series/M2V/
I can see werefuck'dville now... almost there! Been traveling 5 long years...
At what point (33%, 50%, 75%) will the banks become dictators of US policy?
ah about 100 years ago..thats when