Fed passes China in Treasury holdings

[hippie]

By Michael Mackenzie in New York

Published: February 2 2011 00:01 | Last updated: February 2 2011 00:01

The Federal Reserve has surpassed China as the leading holder of US Treasury securities even though it has yet to reach the halfway mark in its latest round of quantitative easing, according to official figures.

Based on weekly data released on Thursday, the New York Fed’s holdings of Treasuries in its System Open Market Account, known as Soma, total $1,108bn, made up of bills, notes, bonds and Treasury Inflation Protected Securities, or Tips.


http://www.ft.com/cms/s/0/120372fc-2e48-11e0-8733-00144feabdc0.html#axzz1Cn4lyfav

 

[krazykarl]

tell me you're kidding. the fed has held more US debt than china ever has.

 

[Tsing Tao]

this happened several weeks ago. by march/april, we should see the fed overpass japan and china alone.

 

[Scataphagos]

What are the consequences of the Fed holding such large assets on its balance sheet?

What will happen when they unwind those positions?

WILL they unwind them... that is, somehow have them disappear "into the ether"... presumably without consequence ?

The USA is into "Wild and Reckless Deficit Spending" (Thank You Odumbo, you SOB... same for Bush)... while Congress abrogates its CONSTITUTIONAL OATH...

How does this all play out? Nobody really knows... ?? However the odds favor high inflation/hyperinflation, currency debasement, lower standard of living for nearly all Americans.

 

[Martinghoul]

Quote from Scataphagos:
What are the consequences of the Fed holding such large assets on its balance sheet?

What will happen when they unwind those positions?

WILL they unwind them... that is, somehow have them disappear "into the ether"... presumably without consequence ?

Why does the Fed need to unwind? What consequence might you be referring to? The only consequence of a bond disappearing is a large redemption payment (in this case the US Treasury pays the Fed).

 

[athlonmank8]

wow. I'm committing suicide tomorrow.....

 

[athlonmank8]

Well that wasn't that funny. But neither is this.

 

[gianno]

Quote from Scataphagos:

What are the consequences of the Fed holding such large assets on its balance sheet?

What will happen when they unwind those positions?

You can't be that stupid. Simply can't. I find it impossible I came accross such a level of plain stupidity here. You must be joking of course...

I give you just one reason for the FED not unwinding such holdings. The FED must maintain price stability by law. Unwinding the positions would cause price instability and that will be in violation of the FED charter.