The Federal Reserve will remain the biggest buyer of Treasuries, even after the second round of quantitative easing ends this week, as the central bank uses its $2.86 trillion balance sheet to keep interest rates low.
While the $600 billion purchase program, known as QE2, winds down, the Fed said June 22 that it will continue to buy Treasuries with proceeds from the maturing debt it currently owns. That could mean purchases of as much as $300 billion of government debt over the next 12 months without adding money to the financial system.
This was inevitable. With all the clowns running around on news and print, driveling out the FED line of no more QE.... Wait, what's this? FED still buying treasuries after QEII ends???
If the FED is continuing to buy treasuries and other trash assets, the QEII has not ended.... period! It is amazing how brazen these clowns have become. This is so Roman circus type stuff. The FED says it, the compliant media parrots it, some (I hope not most at this point) of the public buys it even though it is blatantly, in your face contradictory.
MOPE has reached new stratospheric heights.... It only works so long as most of the public still believes their tripe. I cannot see how this continues for very much longer. It may prove me wrong though. After all most of our public has been trained to be compliant, and stripped of their critical thinking ability by public education, and a lap dog media.
This works out to roughly US$25 billion a month, which is a far cry from the $75 to 100 billion expended on Treasuries since November 2010. The question now is how long will it take before Wizard Bernanke casts a level 7 QE spell. My cynical mind says the timing will dovetail with November 2012, which suggests we won't see the wizard hats come out until year-end at the earliest.