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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread
VTI 340.56-0.1%Jan 23 4:00 PM EST

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To: gronieel2 who wrote (7018)4/3/2012 7:09:00 PM
From: Boca_PETE   of 10065
 
Thanks for sharing, gronieel2. We appreciate it.

I heard similar advice to the same effect from another advisor yesterday.

How long do you believe the FED can continue buying Treasury Securities to keep interest rates low in an effort to stimulate the economy?

From my viewpoint, the sale of treasuries and their repurchase by the FED have an offsetting impact. Cash comes out of the economy as Treasuries are sold. Cash goes back into the economy, increases the price of treasury securities, and lowers interest rates as the FED buys them from the public. A normal consolidated company in the private sector will call this an intercompany transaction eliminated in consolidation. The Government (and that includes The Fed from my viewpoint) keeps the securities as a liability on the Treasury Dept books and shows them as an asset on the FED's books. Does ENRON ACCOUNTING come to your mind also?

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