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miketiger 
LSU Fan
Baton Rouge
Member since Feb 2005
1168 posts
| Fed is buying 61 percent of US debt (Posted on 4/2/12 at 8:48 pm)
I am no economic guru but this sounds like a house of cards to me. What say you?
LINK
This post was edited on 4/2 at 9:54 pm
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udtiger
LSU Fan
Louisiana
Member since Nov 2006
18056 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 8:49 pm to miketiger)
Let's just hope this house of cards waits until I lock in my mortgage before it falls.
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baybeefeetz
the now
Member since Sep 2009
11674 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 8:49 pm to miketiger)
What does the wsj say about it?
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ljhog 
Arkansas Fan
Lake Jackson, Tx.
Member since Apr 2009
8871 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 8:50 pm to udtiger)
quote:
Let's just hope this house of cards waits until I lock in my mortgage before it falls.
but when it does your mortgage will double or more of the value of your property.
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udtiger
LSU Fan
Louisiana
Member since Nov 2006
18056 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 8:51 pm to ljhog)
I'm won't be moving again anytime soon.
This post was edited on 4/2 at 8:51 pm
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Patrick O Rly 
New Orleans Saints Fan
y u do dis?
Member since Aug 2011
25644 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 8:52 pm to udtiger)
Same here. I got the city's assessment of my property last week. 
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GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
17395 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 8:53 pm to miketiger)
Link is not working.
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Aubie Spr96 
Auburn Fan
lolwut?
Member since Dec 2009
10121 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 8:59 pm to miketiger)
:inb4russian:
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GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
17395 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 8:59 pm to miketiger)
quote:
"Last year the Fed purchased a stunning 61 percent of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis," Goodman writes
Take a guess, what happens when the Fed exits the treasury bill/note buying market?
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PsychTiger
LSU Fan
Land Mass
Member since Jul 2004
15908 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:03 pm to miketiger)
Wonder how China feels about the competition.
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BamaFan89 
Alabama Fan
T-Town
Member since Dec 2009
17784 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:04 pm to GumboPot)
quote:
Take a guess, what happens when the Fed exits the treasury bill/note buying market?
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DeltaDoc
LSU Fan
The Delta
Member since Jan 2008
6192 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:04 pm to GumboPot)
So essentially we are using a line of credit to pay on a maxed out credit card....makes sense.
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udtiger
LSU Fan
Louisiana
Member since Nov 2006
18056 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:05 pm to BamaFan89)
quote:
quote:
Take a guess, what happens when the Fed exits the treasury bill/note buying market?
Unicorn stampede? 
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DeltaDoc
LSU Fan
The Delta
Member since Jan 2008
6192 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:06 pm to DeltaDoc)
What would the economy look like currently if the treasury was not doing this? Honest question.
This post was edited on 4/2 at 9:07 pm
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GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
17395 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:09 pm to BamaFan89)
Okay, I'll answer my own question.
When the biggest buyer exits the treasury bond market demand for said bonds goes way down.
When demand for the bonds (government debt) goes down the price of the bond has to decrease to make it attractive to other buyers.
When the price goes down on a treasury bill/note the yield goes up.
This is bad. Intrest rates will "necessarily skyrocket".
Ts (treasury bills/notes) yields (intrest rates) sets the floor for all other intrest rate products (like mortgages).
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udtiger
LSU Fan
Louisiana
Member since Nov 2006
18056 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:10 pm to GumboPot)
quote:
This is bad. Intrest rates will "necessarily skyrocket".
Ts (treasury bills/notes) yields (intrest rates) sets the floor for all other intrest rate products (like mortgages).
I just need for the apocalypse to hold off afor about another month.
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GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
17395 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:11 pm to DeltaDoc)
quote:
What would the economy look like currently if the treasury was not doing this? Honest question.
The treasury HAS to do this because we have $1.4 trillion deficits.
The Federal Reserve HAS to step in because there is a lack of buyers.
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DeltaDoc
LSU Fan
The Delta
Member since Jan 2008
6192 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:16 pm to GumboPot)
So, in essence, at some point in the future, it will necessarily have to collapse.
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PsychTiger
LSU Fan
Land Mass
Member since Jul 2004
15908 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:19 pm to udtiger)
quote:
I just need for the apocalypse to hold off afor about another month.
You've got plenty of time. Just close before December 21st.
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GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
17395 posts
| re: Fed is buying 61 percent of US debt (Posted on 4/2/12 at 9:20 pm to udtiger)
quote:
I just need for the apocalypse to hold off afor about another month.
Well it would not be the apocalypse.
It is actually good if you have a low rate mortgage locked in and you are a saver (or live on a fixed income). Gasoline and food prices would come down too.
It would suck if you have debt in some type of adjustable intrest rate product. Oh, and if you are the type of homeowner who views their home as an investment...that would be bad too. I personally don't see my home as an investment. It's just a place where I can keep me and my family warm in the winter, cool in the summer and dry during rain.
This post was edited on 4/2 at 9:36 pm
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