Federal Reserve Buying 90% of New Bonds

According to JPMorgan (who would know since as a primary dealer, they flip treasury take-downs to the Fed roughly 30 minutes after issuance for a handsome profit), the Federal Reserve is currently absorbing approximately 90% of new dollar-denominated fixed-income assets. 
Go back and re-read that last sentence.  That’s right, even the financial MSM is now admitting that the Fed is now nearly entirely monetizing the US deficit outright.
This is why QE4 will be announced next Wednesday (which has already been fully priced in thanks to multiple leaks from the Chicago Fed’s Evans as well as Bernanke last week) and why the Fed will ramp up outright purchases to $85 billion a month ($1.02 Trillion/yr) when operation Twist ends- there are simply no remaining buyers of US debt. 

Those who fail to see where this is headed may wish to acquire a copy of When Money Dies to grasp how the situation played out in Weimar Germany. [Read more...]

A la Weimar: The Bank of England has just crossed the line into Outright Government Monetizing

Last week’s news that the Bank of England had stopped Quantitative Easing early because it was not needed was a load of rubbish.  The truth is that it was stopped early because MORE COUNTERFEITING WAS NEEDED, and the BOE figured out a way to directly monetize the debt, while out of public scrutiny. 
QE will continue TO INFINITY….AND BEYOND!!!  on both sides of the pond.
The MSM story actually compares the practice to Weimar Germany.

As the Telegraph reports:

So now we know why the Bank of England’s Monetary Policy Committee called a halt to more Quantitative Easing this week – it’s because the Chancellor and the Governor of the Bank of England have concocted a backdoor way of doing the same thing. [Read more...]