Wednesday, November 16, 2011

Monetization of public debt

Fed Now Largest Owner of U.S. Gov’t Debt—Surpassing China

Federal Reserve Chairman Ben Bernanke (AP Photo/Alex Brandon)
( - At the close of business on Tuesday, the debt of the federal government exceeded $15 trillion for the first time--with the largest single owner of the publicly held portion of that debt being the Federal Reserve.
Over the past year, as the Federal Reserve massively increased its holdings of U.S. Treasury securities and entities in China marginally decreased theirs, the Fed surpassed the Chinese as the top owner of publicly held U.S. government debt.
In its latest monthly report, the Federal Reserve said that as of Sept. 28, it owned $1.665 trillion in U.S. Treasury securities. That was more than double the $812 billion in U.S. Treasury securities the Fed said it owned as of Sept. 29, 2010.
Comment: Either we will fall into a a hyper-inflationary depression or into a deflationary depression; whatever, we'll fall over the cliff with this kind of monetary policy.

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