Source: Banzai7

Source: Banzai7

The next time you hear propaganda from Fed officials or the financial MSM that the Fed will end QE by the end of 2013, please recall this startling statistic:  thus far in 2013, the Fed has increased its Treasury bond holdings by $51.1 billion, while the official US debt has increased by only $47.2 billion over the same period. 
This confirms with startling clarity that the Federal Reserve is the ONLY remaining purchaser of US debt in size, and that the Fed must not only take up all of the newly issued US debt, but it must also absorb the maturing treasury bonds coming due.

QE is going to INFINITY…AND BEYOND… and will continue until one of three events occur:
1. Gold revaluation (the final deflation-fighting tool in Bernanke’s toolbox)
2. Dollar devaluation (essentially #1 just announced in dollar terms) such as Venezuela announced Friday
3. Hyperinflation of the dollar & complete systemic collapse.


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Fed Has Bought More U.S. Gov’t Debt This Year Than Treasury Has Issued

( – So far this calendar year, the Federal Reserve has bought up more U.S. government debt than the U.S. Treasury has issued.

On Dec. 31, the total debt of the U.S. government was $16.4327 trillion and then-Treasury Secretary Tim Geithner announced that the government had hit what was then the legal debt limit. Last week, however, Congress enacted a law to suspend the federal government debt limit until May 18, 2013, and allow the administration to resume increasing the debt.

By the close of business on Wednesday, Feb. 6, according to the U.S. Treasury, the total federal debt had climbed to $16.4799 trillion—an increase of $47.2 billion for the calendar year.

At the close of business on Jan. 2, the Federal Reserve had owned $1.661 trillion in U.S. Treasury securities. By the close of business on Feb. 6, it owned $1.7172 trillion—an increase of $51.1 billion for the calendar year.

Thus, the Federal Reserve’s purchases of U.S. government debt in this calendar year have exceeded the Treasury’s net debt issues by about $3.9 billion.
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  1. The Reagan tidal wave of 30yr Treasuries are maturing now. If you remember back then, Jimmy Carter caused massive inflation (jumbo CD’s paying 14%) by printing money. So when Reagan took office, he stopped the money printing and started issuing 30yr Treasury bonds to fund the govt. spending, which were bought up in those days by the Japanese and Saudi Arabian govts. Those bonds are now coming due and the tidal wave of redemptions will continue for the next 7 years.

    So if someone can find how many billions in 30 yr bonds were issued in the 1980’s then you’ll know how much extra the Fed will have to come up with for the redemptions.

    • @steve… seems you may have fallen victim to a little GOP history revision. 
      In /71 (obsessed with re-election) Nixon fired Fed Chairman William McChesney Martin and put his economic counsel Arthur Burns in charge. He also closed the final link to the gold standard (and oil prices exploded), expanded Social Security and welfare programs, fully funded Vietnam, and imposed wage and price controls. He demanded low interest rates (unemployment must be contained before the election), and his crony at the Fed followed orders and the printing presses went into action (when Burns pushed back bogus stories were planted in the media and he was threatened with legislation to weaken the Fed if he didn’t play ball).
      Of course this led to massive inflation (WH records have Nixon “accepting inflation” as long as employment numbers stay low), with oil prices leading the way through the Ford term… and inflation reached 9% by the time Nixon resigned. It was Carter who got rid of Burns and appointed Paul Volker (after a brief term by another dove failed), who was responsible for finally controlling inflation (results early in the Reagan term) through brutal tight money policies that included 20% interest rates… but it’s so much more “American” to sell the “Ronnie road in on his white horse” myth!
      Actually, Reagan (really his corporate handlers) fought with Volker over his hawkish monitary policies. He was finally ousted in /87 as he wouldn’t play ball with Reagan’s Wall Street handlers in removing financial regulation (hmmmm where have I heard that before).

  2. This is like having ringside seats to an avalanche that many others only see as a pretty mountain. Instead of ice and snow its dollar bills, and with one loud bang it will all come crumbling down….it is disturbingly fascinating to watch!
    (But only if your seat is a nice stack of PM’s!!!)

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