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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: teevee who wrote (149928)	4/22/2011 12:27:08 PM
From: ChanceIs	1 Recommendation Read Replies (1) \| Respond to of 206093

>>>No QE 3 is needed and here is why. About $1.2 trillion in treasuries are due over the next 12-18 months and the money will be printed to redeem them.<<< This is a raging argument. I am not bought into it. Bernanke owns the T-Bills. It is the Treasury which must come up with the $$$$ to redeem them from him. The Treasury will get a short term loan, buy the bill back, issue a brand new bill which Bernanke will buy - with the just redeemed cash - and the Treasury will take said cash and settle the short term loan. Its just a rollover. No new cash/printed money. Of course the primary dealers/IBs will take a cut for handling the new auction. There will be no new money printed for redemptions. You are basically describing QEII lite. Jim Rickards takes the position that the Fed will be the marginal buyer in this instance, and can therefore control rates. Emphasis on MARGINAL: kingworldnews.com (Rickards address QEII ending and/or QEIII beginning around half way through the interview.) I don't buy it, but concede that it is arguable. A big objection is that in addition to rolling over its old debt, the Treasury needs to issue roughly $1.6 trillion of new debt annually to cover that year's deficit spending. That money will be printed - unless you think that the Chinese will step up - or the University of Texas which just famously bought $1 billion of gold and took physical delivery wants a piece of the new Treasury issue action.