I think tracking QE (not operation twist) and the budget deficit should provide
the answer to this question. At present the Fed is in operation twist mode, which
means they are just rotating money from short term bills to long term bonds.
That said, the debt based monetary system is so screwed up that it's impossible
to know how exactly the Fed's printing influences prices. What makes matters
so complicated is that all so-called "money" is debt. Fed can create it, banks can
too! The Fed normally just targets interest rates, not doing QEs left and right, and
that itself creates new money and inflation! Govt. statistics is screwed up.
Welcome to the Brave New Old World without the
gold standard. It's simply too complicated a task for one to figure out WTF is going
on with our currency.
At the time the Fed actively printed, they bought close to all newly issued government debt.
Right now they are buying some from QE2 lite, and rotating some too, but not 60%. That said,
what the Fed already bought can have a very dramatic effect on prices, should it get an
appropriate multiplication factor from the banking system (also known as monetary velocity, to
confuse one entirely -vbg-)
I'd say the Fed indeed bought a very decent percentage of newly issued federal debt in 2011, and it's
probably somewhere close to 50%, coz they stopped in late June. |
