Quote from Martinghoul:
The Fed purchased EXACTLY $300bn of Treasury securities in 2009, as per the FOMC decision given here: http://www.federalreserve.gov/newsevents/press/monetary/20090318a.htm
Total issuance of Treasury securities in 2009 is estimated at arnd $2097.7bn (to Q409), according to SIFMA: http://www.sifma.org/uploadedFiles/Research/Statistics/SIFMA_USBondMarketIssuance.pdf
This implies that the Fed purchased arnd 14.3% of the debt issued by the US Treasury in 2009. Not 50%, not 80%, not even an unknown massive amount, which is what you'd hear from the conspiracy nuts.
I think I am going to start a "Stop the Idiocy!" campaign...
Those are interesting statistics, although I suspect that the vast majority of individuals who feel concerned will be at the very least quite sceptical with regards to the accuracy of any data released by an entity that they believe to be lacking transparency, whether that belief is justified or not. So thats the problem here, a lack of trust. So how do we set about correcting that lack of trust?
Just out of interest MartinG, do you trade the market based upon one single statistic, or do you trade the market having assessed a trend, which ofcourse requires multiple data points?
Bearing the previous question in mind, do you anticipate that the Fed will continue with purchases during 2010 or perhaps 2011? If so, in your expert opinion what % do you believe will be sufficient in order to "maintain market stability"? Do you believe that purchases could rise to 30% or do you anticipate a tapering off? Perhaps Fed purchases may only need to occur once every 5 or 11 years?
To anybody who is sceptical, they could suggest that a lot more "damage" could occur over a long period such as 11 years if the intention of the Fed is to cyclically purchase debt every 5 or 11 years for example.
The fundamental problem here is that neither the Fed nor the "government" have provided the "voting electorate" with a long-term performance benchmark by which the "voting electorate" can use in order to assess the progress that is being achieved, and perhaps due to this lack of transparency in terms of where we are "moving to" merely serves to compound an increasingly sceptical (and increasingly informed/misinformed) "voting consumer". Do you agree with me that a lack of transparency only serves to generate more scepticism, and if so, what steps must be taken to ensure that these concerns are 100% nullified in order to prevent an uprising?
Do you see any steps that have already been taken by the US government that may suggest that an uprising has already been accounted for and is infact anticipated, legislation etc?
