Federal Reserve buys 108% of US Debt in the month of January | TigerDroppings.com
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joshnorris14
Florida Fan
Florida
Member since Jan 2009
21480 posts

Federal Reserve buys 108% of US Debt in the month of January

Yes, you read that right.

In January, the Federal Debt increased by $47.2B. Also, the Federal Reserve bought $51.1B in US Treasuries.

And if you aren't aware, the Fed's $51.1B in US Treasury purchases were done through the unsaturated Operation Twist, colloquially known as QE Infinity.

LINK


CITWTT
LSU Fan
baton rouge
Member since Sep 2005
31765 posts

re: Federal Reserve buys 108% of US Debt in the month of January
The Fed and Treasury have been playing this game for quite some time. They admitted to doing so to "keep" the economy sane, thier own estimation was that the DJ would have been at 6000 in November of 2011 had they not done it.


Bravescd14
Alabama Fan
Huntsville
Member since Nov 2009
403 posts

re: Federal Reserve buys 108% of US Debt in the month of January
GG America


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Strannix
LSU Fan
Member since Dec 2012
1574 posts

re: Federal Reserve buys 108% of US Debt in the month of January
quote:

They admitted to doing so to "keep" the economy sane, thier own estimation was that the DJ would have been at 6000 in November of 2011 had they not done it.


If this would be an insane policy for an individual then why not a nation?


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TigerFanatic99
LSU Fan
Granger, IN
Member since Jan 2007
4528 posts

re: Federal Reserve buys 108% of US Debt in the month of January
quote:

In January, the Federal Debt increased by $47.2B


Just think. If we limit our monthly expendatures to match January, we lower our deficit for the calender year to just $566.4 Billion!


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Placebeaux
LSU Fan
One man's LOL is another man's WTF
Member since Jun 2008
27696 posts

re: Federal Reserve buys 108% of US Debt in the month of January
in a debt based system this comes as no surprise. why can we just not abolish the 13th Amendment


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Meauxjeaux
Memphis Fan
90248 posts including my alters
Member since Jun 2005
18917 posts

re: Federal Reserve buys 108% of US Debt in the month of January
We have made Money obsolete.

And the world shrugs.

Go America!


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LSURussian
LSU Fan
Member since Feb 2005
85157 posts

re: Federal Reserve buys 108% of US Debt in the month of January
quote:

Federal Reserve buys 108% of US Debt in the month of January
Yes, you read that right.


I read it but you're still wrong.

Think about it, Joshie, how can anyone buy more than 100% of ANYTHING that is sold? It's mathematically impossible. Even a junior college student in Florida should be able to figure that out.

The Treasury department issued $99 billion in new debt in January. ( LINK) The Fed's treasury portfolio increased via purchases PLUS accrued interest minus maturities.

You can't just compare the U.S. debt balance (which includes accrued interest minus tax receipts for the month) with the Fed's balance sheet at the period beginning and period ending dates.

The result was the Fed purchased about 45% of new T-debt issued in January, NOT over 100%, which is impossible.


Bard
LA-Monroe Fan
BR
Member since Oct 2008
18930 posts

re: Federal Reserve buys 108% of US Debt in the month of January
quote:

The Fed and Treasury have been playing this game for quite some time. They admitted to doing so to "keep" the economy sane, thier own estimation was that the DJ would have been at 6000 in November of 2011 had they not done it.


This wouldn't be a bad plan if Congress were actively working toward lowering the debt, or even the yearly deficit. Instead we've had bizarrely high deficits (in excess of 1T) each year since FY 2009. This means that currently there is no end in sight.


joshnorris14
Florida Fan
Florida
Member since Jan 2009
21480 posts

re: Federal Reserve buys 108% of US Debt in the month of January
You are taking the title too literally Russian. it was meant to grab attention


RCDfan1950
LSU Fan
United States
Member since Feb 2007
13068 posts

re: Federal Reserve buys 108% of US Debt in the month of January
Two words...Cloward-Piven.

Forward.


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LSURussian
LSU Fan
Member since Feb 2005
85157 posts

re: Federal Reserve buys 108% of US Debt in the month of January
quote:

it was meant to grab attention

So you admit to trying your best to be a Drama Queen???

quote:

You are taking the title too literally Russian.
So you admit it is incorrect?



joshnorris14
Florida Fan
Florida
Member since Jan 2009
21480 posts

re: Federal Reserve buys 108% of US Debt in the month of January
quote:

So you admit to trying your best to be a Drama Queen???


If that's the term you want to use to describe that act.

quote:

So you admit it is incorrect?


I would say it is inaccurate, but we're just parsing over terms now.


LSURussian
LSU Fan
Member since Feb 2005
85157 posts

re: Federal Reserve buys 108% of US Debt in the month of January
quote:

I would say it is inaccurate


Never let accuracy get in the way of your political biases......


joshnorris14
Florida Fan
Florida
Member since Jan 2009
21480 posts

re: Federal Reserve buys 108% of US Debt in the month of January
I try not to.


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GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
29264 posts
Online

re: Federal Reserve buys 108% of US Debt in the month of January
quote:

In January, the Federal Debt increased by $47.2B. Also, the Federal Reserve bought $51.1B in US Treasuries.

And if you aren't aware, the Fed's $51.1B in US Treasury purchases were done through the unsaturated Operation Twist, colloquially known as QE Infinity.




It's my understanding the Operation Twist is over. Also Operation Twist is Operations Twist II. Operations Twist 1 took place in the early '60s. Also of note, Operation Twist does not add to the balance sheet of the FR. The purpose of OT II is to flatten the yield curve by buying long term T's and selling short term T's. Thus the term "twist". The desired affect is to lessen the pressure (interest) on long term lending rates (esp. mortgages), since treasuries form a baseline for interest rate products. But again, Operation Twist II is over.

The FR has since moved into what is referred to as QEnfinity, in the cynical financial world, where they are purchasing $40 billion in mortgage back securities per month. I don't know what the desired outcome from QEnfinity is exactly, but the purpose appears to be to take illiquid assets off of bank books.

Since Jan. 30th the FR has also announced as part of QEnfinity the purchase of $45 billion per month of long term treasuries ( LINK).

TBH, I don't know what to think about all this. It certainly seems like the FR is enabling the federal government to continue it's profligate spending (as evidence by the federal spending programs and Washington DC as a boom town).


joshnorris14
Florida Fan
Florida
Member since Jan 2009
21480 posts

re: Federal Reserve buys 108% of US Debt in the month of January
At the December FOMC meeting, the Fed announced that the saturated Operation Twist would become unsaturated. They were buying $45B long term TBonds and selling $45B short term TBonds, but with that change, they began to only buy $45B long term TBonds.


GumboPot
LSU Fan
Saints Fan
Member since Mar 2009
29264 posts
Online

re: Federal Reserve buys 108% of US Debt in the month of January
Gotcha.


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