When you say theft cdcaveman, sure you mean it in the sense that taxes are theft right? Because if the Fed buys Treasuries its giving money to the Federal government, which the Federal government spends (as as alternative to tax revenues), correct?
What exactly is "quantitative easing"?
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When you say theft cdcaveman, sure you mean it in the sense that taxes are theft right? Because if the Fed buys Treasuries its giving money to the Federal government, which the Federal government spends (as as alternative to tax revenues), correct?
Let me ask you two related questions gents:
That balance sheet Mcnoob posted above shows the Fed holding just short of $9k (whatever that is) of Treasuries. How does that compare to the total amount of Treasuries outstanding? Any idea?
If the Fed is not going into the market to buy Treasuries, who is doing it now, especially when everyone knows rates are going up, and going up big? I think maybe countries like China have to buy some to keep the Yen from appreciating against the dollar, but are those the only material buyers? Who else would buy Treasuries given these facts? I understand with world in turmoil, someone might want to hold dollars, but why put the money in Treasuries now with the huge interest rate risk when you could buy stocks or real estate? Those are risky to be sure, but you KNOW what will happen to bond prices when the Fed keeps raising rates, and it won't be pretty!
Thanks!
That balance sheet Mcnoob posted above shows the Fed holding just short of $9k (whatever that is) of Treasuries. How does that compare to the total amount of Treasuries outstanding? Any idea?
If the Fed is not going into the market to buy Treasuries, who is doing it now, especially when everyone knows rates are going up, and going up big? I think maybe countries like China have to buy some to keep the Yen from appreciating against the dollar, but are those the only material buyers? Who else would buy Treasuries given these facts? I understand with world in turmoil, someone might want to hold dollars, but why put the money in Treasuries now with the huge interest rate risk when you could buy stocks or real estate? Those are risky to be sure, but you KNOW what will happen to bond prices when the Fed keeps raising rates, and it won't be pretty!
Thanks!
It osn't the only tool the fed has... Repo rates.... That's where the tightening is happening really.
Many institutions MUST only buy U.S. Treasuries, or mostly. And it would depend what their long-term obligations are -- e.g., insurance companies match possible obligations, etc.
But the way inflation / money printing works, is that ever larger amounts are needed. Thus, even just stopping printing / buying Treas obligation, means that leverage must be reduced - thus the drops in cryptos, high multiple stocks, NFTs, etc.
Yes but I use this one:
https://fred.stlouisfed.org/series/RRPONTSYD
It's essentially bank deposits that got converted to treasuries, aka it is money that doesen't circulate.
When the fed prints money they expropriate value from the wage earning and fixed income classes to the class of people that own inflationary assets . People that work get screwed because their wages lag and go up discreetly .. so wages slowly step up as inflation Is continuous and runs ahead of wages....this is where the value is extracted....so it's theft because it's involuntary taken from the people...it's really terrible...it subsidizes borrowing at the expensive of prudent saving...it forces people to take risk to keep up with inflation when there is value in just saving . So yes inflation is theft... Just like taxation. #mises
Interesting.
What a racket, create money out of thin air, then buy up hard assets..