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It's Official - The Fed Is Now Buying European Government Bonds

Tyler Durden's picture


As if the 'risk-less' dollar-swaps the Fed has extended to any and every major central bank were not enough, William Dudley just unashamedly admitted that the Fed now holds 'a very small amount of European Sovereign Debt'. Explaining this position, as Bloomberg notes:


Dudley, testifying to a House panel, noted that he doesn't see more efforts by the Fed to buffer the US from Europe's tempests and believes European banks are deleveraging in an orderly manner. So not only is the US taxpayer bailing out Europe via the IMF (as we noted here a week ago using Greece as an intermediary) and the Fed is providing limitless USD swap lines but now we join the ECB in monetizing European government bonds - something we warned might happen back in December 2010. As for being a small amount - wasn't MF Global's holding relatively small too? And aren't we getting a little full from all this buying?

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Tue, 03/27/2012 - 11:58 | 2294511 Money 4 Nothing
Money 4 Nothing's picture

"Qu'ils mangent de la brioche", Cake finished...

Tue, 03/27/2012 - 14:38 | 2295081 FreeNewEnergy
FreeNewEnergy's picture

Great photo. Here's my caption:

Bernanke: Tim, how are you pulling my wanker when you have both hands on your napkin?

Timmah: I'm not pulling your wanker.

Bernanke: Then it must be Merkel.

Timmah: She gives good hand.

Tue, 03/27/2012 - 11:46 | 2294450 Brokenarrow
Brokenarrow's picture

I'm a senior. I know alot of seniors. Berneke has to be one of the most hated men in America. He has turned this country into a plutocracy for his future employers. I'm afraid to post what I really think. If he droped dead today, I would drink a martini and dance.

Tue, 03/27/2012 - 12:09 | 2294572 WestVillageIdiot
WestVillageIdiot's picture

Dear Brokenarrow,


Feel free to drink a glass of ZIRP and shut the fuck up.


The Honorable Ben Shalom Bernanke

Tue, 03/27/2012 - 13:18 | 2294859 drivenZ
drivenZ's picture

Tired of people whining about Bernanke...The blame lies with the current congress and the congresses that came before them on both sides of the aisle. Bernanke can't cut the defense budget or fix SS and medicare, he can't spur business to spend etc etc etc.  The real issues needing to be fixed are in the hands of congress. The past ones failed and the current one has done nothing. 

Tue, 03/27/2012 - 15:12 | 2295192 baby_BLYTHE
baby_BLYTHE's picture

Cut the Defense budget? Ya, he single handedly could do it. The QEs were also to help keep the military running overseas.

Tue, 03/27/2012 - 15:35 | 2295272 drivenZ
drivenZ's picture

so Bernanke can change foreign policy, end the wars and cut the defense budget? news to me. 

Tue, 03/27/2012 - 13:35 | 2294916 resurger
resurger's picture


toast to that Sir

Tue, 03/27/2012 - 13:42 | 2294939 Crab Cake
Crab Cake's picture

Yeah, you would be afraid. The truth is you've been willfully blind for the last 30 years, along with the rest of your senior friends. IT HAS BEEN A PLUTOCRACY THE WHOLE TIME, ONLY NOW ITS NOT BENEFITING YOU.

So, you go be scared and leave the work to people you never cared about in the first place because, lets be honest, the only reason you give a shit now is that the fascists are after you, your retirement, and your pocketbook. Dont start acting like you give two fucking shits about what the empire does to others, its all about you, and always has been.

Tue, 03/27/2012 - 14:47 | 2295103 FreeNewEnergy
FreeNewEnergy's picture

Why wait for that fucker to drop dead. Have a drink now. Check above for Bloody mary recipe.

Serenity now... insanity later.

Tue, 03/27/2012 - 11:46 | 2294456 dick cheneys ghost
dick cheneys ghost's picture


Tue, 03/27/2012 - 11:51 | 2294457 slewie the pi-rat
slewie the pi-rat's picture

define "monetizing"

Tue, 03/27/2012 - 12:04 | 2294551 ebworthen
ebworthen's picture

Ben swaps his Wife for Timmy's blow up doll?

Tue, 03/27/2012 - 12:36 | 2294698 slewie the pi-rat
slewie the pi-rat's picture

looks like they have spinach, but no peas, eb

is that the ameri-way?

i bought some some cherry tomatoes from spaceway on sale last week--0.99;  when i got home, i saw they were from mexico

when i smelled them, they smelled like manure!

Tue, 03/27/2012 - 13:14 | 2294838 francis_sawyer
francis_sawyer's picture

My advice...

Scoop out the seeds, put them on a paper towel after giving them a slight rinse... Let them dry out, plant them is small pots & keep them under grow lights until May... Take them outdoors when they are about a foot high & plant them in the ground... Give them a shot of fertilizer, keep them watered & you'll have all you want come late July...

Tue, 03/27/2012 - 11:47 | 2294459 Stoploss
Stoploss's picture

That's it. Im going out back an gettin started on the hangman's gallows.


It ships UPS in case anyone else want's one.

Tue, 03/27/2012 - 13:50 | 2294955 Crab Cake
Crab Cake's picture

Most municipalities have conveniently provided lamp posts, unless youre really dead set on snapping their necks for a swift end. Personally though I dont think you have any intention of doing anything, and youre just mouthing off, which is too bad.

Tue, 03/27/2012 - 11:48 | 2294467 AN0NYM0US
AN0NYM0US's picture


"I think the chef is a patriot"

Tue, 03/27/2012 - 11:49 | 2294470 shiborlover
shiborlover's picture

Basically FED is going to buy European bonds in order to avoid any depreciation of Euro currency (that can help labour competitiveness in that zone and cause inflation, slashing its debt)....Well good to know that Euro zone is pretty much screwed in the medium run....

Tue, 03/27/2012 - 12:47 | 2294749 slaughterer
slaughterer's picture

Hey, it was Black Friday then.  The Fed could not resist the bargains in the European Sovereign Debt Market. 

Tue, 03/27/2012 - 12:48 | 2294754 slaughterer
slaughterer's picture

The ECB even threw in a waffle maker. 

Tue, 03/27/2012 - 11:50 | 2294477 LarryDavis
LarryDavis's picture

What does it matter if the Fed loses money on bonds?  

Tue, 03/27/2012 - 11:49 | 2294479 bnbdnb
bnbdnb's picture

And there is the reason the EURUSD isn't falling.

Tue, 03/27/2012 - 11:55 | 2294505 Bam_Man
Bam_Man's picture

Amazing, isn't it? The currencies seem to be stable versus each other, but are dropping like a bag of rocks versus oil and other commodities.

Tue, 03/27/2012 - 12:08 | 2294570 DB Cooper
DB Cooper's picture

The Fed = manipulators and speculators

Tue, 03/27/2012 - 12:10 | 2294580 WestVillageIdiot
WestVillageIdiot's picture

Sadists and masochists



Tue, 03/27/2012 - 11:57 | 2294482 SillySalesmanQu...
SillySalesmanQuestion's picture

Gotta prop up those "other banks" that the FED owns and controls. The FED...Central Banker to the world. As we have known here for quite some time, the FED does not have the best interests for U.S. or its citizens as they systematicly loot, pillage, and plunder us into oblivion.

Tue, 03/27/2012 - 11:51 | 2294485 yogibear
yogibear's picture

Bernanke has made himself to be the financial Moses. With the waving of his staff all debt is transferred and eliminated. 

Time for the world's bond vigilantes  to challenge his balance sheet deception. There is a lot more debt to the US taxpayer.

Bernanke and the US should be downgraded in the credit world a couple more notches down.

Tue, 03/27/2012 - 13:08 | 2294813 Dingleberry
Dingleberry's picture

There are no bond vigilantes. That is a myth, and they only rape minor economies. What we have now are GOLD BUGS. 

Tue, 03/27/2012 - 11:53 | 2294494 GrinandBearit
GrinandBearit's picture

When is this fiat paper ponzi scheme ever going to end?  It needs to collapse NOW!

Bernanke and Geither need and introduction:  Mr. Bullet, I'd like to introduce you to Mr. Head.


Tue, 03/27/2012 - 11:53 | 2294495 Bam_Man
Bam_Man's picture

"Managing reserves" is a euphemism for "the means by which we simultaneously devalue the dollar and euro against each other in the absence of an external standard."

In a debt-saturated, low/no-growth environment, it's all about executing "managed de-valuations".

Tue, 03/27/2012 - 12:00 | 2294541 gatorengineer
gatorengineer's picture

A fancy way of saying were going to f the chinese in the Arse...... fixed it for ya......

Tue, 03/27/2012 - 12:38 | 2294707 Its_the_economy...
Its_the_economy_stupid's picture

External standard...Hmmmmm, let's see....it's yellow, shiney and barbaric.

Tue, 03/27/2012 - 11:54 | 2294500 HD
HD's picture

Fed will bail everyone on the planet out...except US consumers.

Tue, 03/27/2012 - 11:54 | 2294501 dick cheneys ghost
dick cheneys ghost's picture

Somebody please tell me the Difference between Communist China and the USA......


please, Im waiting.........

Tue, 03/27/2012 - 11:58 | 2294509 Paul Atreides
Paul Atreides's picture

China promotes the sale of precious metals to its populus.

Tue, 03/27/2012 - 11:56 | 2294512 Bam_Man
Bam_Man's picture

They eat with chopsticks.

Tue, 03/27/2012 - 12:13 | 2294566 Money 4 Nothing
Money 4 Nothing's picture

They eat with chopsticks we make for them in Georgia USA, not good enough argument. Next?

Georgia chopsticks: http://www.11alive.com/news/article/194380/40/Chinese-chopsticks----Made-In-Georgia

My answer is, they don't have all of our industry yet, we have the best Porn stars in the US bar none! Well, Sweeden runs a close 2nd?

Tue, 03/27/2012 - 15:13 | 2295195 Dien Bien Poo
Dien Bien Poo's picture

we dont eat dog in the US. yet.

Tue, 03/27/2012 - 23:42 | 2296403 boogerbently
boogerbently's picture

They own us, we DON'T own them.

Tue, 03/27/2012 - 11:57 | 2294507 ebworthen
ebworthen's picture

Ben:  "The Spanish paper is even chewier than that Greek stuff."

Timmy:  "And more bitter.  Pass the pillar of salt please?"

Tue, 03/27/2012 - 11:57 | 2294513 kito
kito's picture

european govt bonds are all the rage at the d.c. dinner parties....it's a must have accessory to go along with prada shoes and louis vuitton bags......

Tue, 03/27/2012 - 11:57 | 2294514 Jacque Itch
Jacque Itch's picture

You need to hold a caption contest with the pic of those Gangstas eating the taxpayer for lunch

Tue, 03/27/2012 - 12:22 | 2294619 Vincent Vega
Vincent Vega's picture

Nice idea. I'll take a shot at it: 1) Wow, taxpayer taste just like chicken. 2) Leg and ass are ok but I really like the flavor of cock.

Tue, 03/27/2012 - 11:58 | 2294520 Dick Darlington
Dick Darlington's picture

With such an experienced "bond manager" like Bernanke in the wheel, nothing can go wrong. Nothing!

Tue, 03/27/2012 - 11:59 | 2294530 NotApplicable
NotApplicable's picture

Lemme guess. They bought all of the MFG holdings for next to nothing.


Tue, 03/27/2012 - 11:59 | 2294531 tahoebumsmith
tahoebumsmith's picture

Remember this, " For every one lie you tell, you have to invent two or three more to protect yourself from the first one."


Tue, 03/27/2012 - 23:47 | 2296406 boogerbently
boogerbently's picture

First prize, Gold medal, Pulitzer, Olympic, Nobel worthy post.

You have succinctly defined the US govt.


Tue, 03/27/2012 - 12:04 | 2294550 Ted Baker
Ted Baker's picture


Tue, 03/27/2012 - 12:06 | 2294562 Quinvarius
Quinvarius's picture

Shouldn't they be raiding gold to cover up their global debt monetization about now?

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