Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (28907)	5/31/2010 7:09:16 AM
From: ggersh	Read Replies (2) \| Respond to of 71447

But what do the Americans when their central bank stops purchasing trillions of securities for a moment? They are concerned about the situation in the Euro-periphery. Ridiculous. We sell them to Europe! -vbg-

To: RockyBalboa who wrote (28907)	5/31/2010 2:26:53 PM
From: niceguy767	Respond to of 71447

The macro picture may just be that a low Fed rate makes it possible for banks to obtain fed loans to buy freshly printed Fed bonds and maintain a reasonable spread. This investment vehicle probably locks in a low fed rate for the foreseeable future as were the fed to increase its fed rate demand for bonds by the banks might dry up real fast unless treasury bond rates are increased commensurately...which increases cost of fed debt geometrically given existing low rates. The Feds get to keep printing money while the banks get to keep making a profit from buying bonds. It's all great until latest stopgap technique hits the wall as either rates run up or the banks become saturated with US treasuries.