Something to keep in mind of.
Fed behind 50% of all Q2 treasury purchases:http://www.zerohedge.com/article/federa ... -purchasesSo, how will the Feds keep interest rates low after the POMO program expires?
Simple: In case I haven't made it clear before, the Fed is going to turn the money markets into their private fund. The full faith and credit of
the United States dollar is being replaced by the full faith and
credit of Lehman and Bear Sterns CDO writers who in court documents
admitted that their products were "junk, vomit, and garbage." [actual
words]
It may surprise you but I am actually BULLISH on sub-prime - for the
simple fact that I am getting a higher interest rate than treasuries
and corporate bonds AND b/c Bernanke is buying them non-stop 24/7 for
the past year. His plan to stop buying MBS OFFICIALLY ends
early next year (around March I believe, they gave it a 3 month
extension).
But just because I am taking the risk of buying these garbage pails
does not mean you, other Americans, or the rest of the world should be
too. I made a conscious decision and am aware of the risks involved.
The Chinese are aware of it too which is why I posted the link to
their talks w/Brazil. How do you think they feel about their precious
treasury holdings being interchangeable for "garbage, junk, and
vomit?"
http://debtsofanation.blogspot.com/2009 ... tinue.htmlThe other 50% of treasury purchases were bought by foreign central banks - and mostly on the shorter end of the curve. Which leaves the Treasury with a huge problem funding the longer end of the curve. My advice? Watch those "Caribbean banking centers" [aka slush funds] buying/selling activities.
