11 votes

2014 Fed Update: Buys 60% of U.S. Govt Deficit


  1. January    $10 billion      $40 billion    1,2
  2. February   $194 billion   $35 billion   3,2
  3. March       $36 billion      $34 billion   4,2
  4. April     ($107 billion)   $30 billion   5,2
  5. May       $130 billion      $24 billion    6,2
  6. June      $57 billion     $25 billion      7,8
  7.  Total      $320 billion      $188 billion      

They bought a roughly equal number of mortgages from private banks.

REF 1 http://www.marketwatch.com/story/us-posts-10-billion-budget-..., http://www.cbo.gov/sites/default/files/cbofiles/attachments/...
REF 2 http://www.newyorkfed.org/markets/tot_operation_schedule.htm...

REF 3: http://www.bloomberg.com/news/2014-03-13/budget-deficit-in-u...
REF 4: http://www.marketwatch.com/story/us-march-budget-deficit-36-...
REF 5: http://www.reuters.com/article/2014/05/12/us-usa-economy-bud...

REF 6: http://www.cnbc.com/id/101751486
REF 7: http://www.treasurydirect.gov/NP/debt/search?startMonth=06&s...
REF 8: http://www.forbes.com/sites/samanthasharf/2014/06/18/fed-cut...

UPDATE: really only need 2-3 websites and some math for data: REFS 2,7,8.

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Debt laundering

The biggest problem with debt laundering is that the money never gets clean.
The dirty money just gets dirtier and dirtier until no one wants to hold it or even touch it.

So the questions are

Who will buy the treasuries when the Fed stops?
Who CAN buy that staggering amount of US Treasuries?
Who would want to take on interest free risk?
What happens to interest rates when demand for Treasuries drops
How will the U.S. Fund its deficit spending?

Please subscribe to smaulgld.com

You say "when" the Fed stops buying.

What makes you think that "when" will ever happen? The Fed is our government's very own Buzz Lightyear: "QE to infinity -- and beyond!"

Recommended reading: The Most Dangerous Superstition by Larken Rose

Reminds me of when I tried to pay off my credit cards with my

Other credit cards........ Not a happy ending.

"A vote for the lesser of two evils is a vote to keep things the same", Buckminster Fuller..
A choice for liberty is always a choice for liberty.

What amazes me

is that the government found enough suckers to buy 40% of the debt.

Recommended reading: The Most Dangerous Superstition by Larken Rose

Now that you mention it

It probably explains why they are buying mortgages-- they are buying mortgages fron private banks and telling them to buy treasuries. That would make up the difference.


A private bank with the monopoly power to counterfeit money buys an equal number of mortgages from other private banks that are subservient to the the Fed.

Who owns most of the US now? The Federal Reserve.

You can't make this crap up. When I explain to my friends and neighbors that the Fed is buying up all these securities and mortgages they first look at me in disbelief, then they get a little miffed, shrug their shoulders, then want to talk about something else.

The Rulers are not the primary problem in the US, it is the Sheeple. So many Sheep make it impossible for the Shepherds to recognize that there are Mustangs who refuse to be kept.

So no taper then? I am

So no taper then? I am starting to believe they are tapering to keep the market under the assumption the economy is improving but diverting those resources still to other buying programs.From the FOMC page 1:

However, asset purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.

Southern Agrarian

Yep ...

... they are the magicians. "Watch this hand; pay no attention to that hand."

Also, keep in mind that the Federal Open Market Committee sets the POLICY, but the New York Fed conducts ALL FED MARKET OPERATIONS. And THAT part of the Fed is NEVER audited.

The President of the New York Fed has the REAL power in the system, not the Chairman of the Board of Governors, not the FOMC.

When the Federal Reserve is monetizing debt, there is only one reason why: nobody else will buy it (in sufficient quantities).

When the lender of last resort really is the lender of LAST resort, there could very well be trouble up ahead, unless they can come up with yet another way to push the can down the road a little more.

What is this you say?

They tapered. They were going to buy 61% but only bought 60% instead. So compared to the imaginary scenario that never happened they bought less. The technical justification for this approach is... HEY LOOK JUSTIN BIEBER JUST CRASHED HIS LAMBORGHINI!!!!!!