Fed buying treasuries.... question

Quote from lrm21:

I think in the short term it won't hurt.

Its classic Beggar Thy Neighbor.

PRC is caught in the middle.

On the one hand as was said, U.S. is going to take the long term treasuries of their hands.

On the other hand, the dollar should weaken, which will hurt PRC exports.

I say should weaken because, as was just mentioned everytime the FED does something bold and inflationary dollar rallies.

I think however Gold jump quite a bit, and the market is seeing this for what it is, and outright helicopter drop. So they dollar may start to fold here.
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This is what PRC will do.

They will print just like we do to match dollar for yuan in a peg system.

Sooner or later. Commodity seller will demand more funny money for their product. By then, inflation will be back. If China's economy overheat first, they will stop printing first and their Yuan will appreciate against US dollar. IF our economy overheat first, we will stop printing and their yuan will depreciate against US dollar.
 
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Households even with the record low interest rates are not taking on new debt. In fact, they are saving! Bushvilles are now popping up.


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Businesses are not taking on new debt to purchase whatever to expand their business. Maybe they're too busy laying people off and cutting their dividends to save money.


And now the Academic is buying long bonds to push down rates. lol. Doesn't he understand that the rates don't matter anymore? Only in the academia could you find these people who disregard reality and stick with their own theories and models.

Today was a nothing day. All that was said today was that the Academic is trying to put more money into the credit balloon that has already been popped.
 
Quote from Covertibility:

Households even with the record low interest rates are not taking on new debt. In fact, they are saving! Bushvilles are now popping up.



Businesses are not taking on new debt to purchase whatever to expand their business. Maybe they're too busy laying people off and cutting their dividends to save money.


And now the Academic is buying long bonds to push down rates. lol. Doesn't he understand that the rates don't matter anymore? Only in the academia could you find these people who disregard reality and stick with their own theories and models.

Today was a nothing day. All that was said today was that the Academic is trying to put more money into the credit balloon that has already been popped. [/B]
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agree mostly, but your take on the chart data is way off. the 'rate of change' in consumer debt is due to credit lines being pulled- business data is more of same. not like this is all by choice- some is fear and, thus, saving. much though is lack of access to credit.
 
http://market-ticker.org/

Be warned Ben....

The BOE executed their first "QE" operation today.

The "bid to cover" was an astonishing 7.35.

This means that for every bond purchased 7.35 were tendered, or made available by willing sellers.
 
Quote from gangof4:

agree mostly, but your take on the chart data is way off. the 'rate of change' in consumer debt is due to credit lines being pulled- business data is more of same. not like this is all by choice- some is fear and, thus, saving. much though is lack of access to credit.
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I would've cited the credit lines but I'm not buying that excuse anymore. When ya look at the expenditure measures be it the PCE, retail sales, new and used car sales, even comparing the retailers and how well the low end like Walmart and Family Dollar are trouncing the Targets and Costco's, etc.. it shows spending has stopped across the board.

There's some grocery store data showing the sales of store brand names up 20% from a year ago as shoppers switch over from the regular brands.

It's hard to believe that the lack of credit is creating such a dramatic shift in consumer habits these days.
 
The U.S. has fallen into the time old strategy of 'inflate or die.'

Basically, this strategy is an overt attempt to screw over all creditors, foreign and domestic, as each dollar loaned to the U.S. will be paid back in dollars worth vastly less in real purchasing power.

No one knows if the U.S. can even reflate asset prices, given the death spiral of deflation gripping the globe, no matter how insanely the federal reserve 'expands its balance sheet,' nor no matter how much stimulus the U.S. government ushers forth.

It's all a shot in the dark at this point, and Bernanke is a disaster.
 
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