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Fed. Road to hell.
  • How QE2 works exactly?

    Let's look.




    Since October 2010 on Fed balance you see 675 billlions increase (for securities). National debt increased by 783 billions at the same time.
    So, about 86% of debt increase had been sponsored by Fed :-)
    In last three months since 18 February till 19 May, US debt increased by 221 milliards, in the same time Fed balance increased by 304 billions.
    This will be about 137% of debt issued.
    Plus US have problems with debt limit, so are forced to stop many payments to pension funds and go to over markets to finance staggering deficit.
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  • That's why it's insane to call it debt. They just print dollars, nothing more (figuratively speaking). They don't owe the money to the FED, but due to a law of 1913 they do.
  • @johnnym

    >That's why it's insane to call it debt.

    Technically this is debt and in fact this is debt. As foreign owners are running out of it (this is why we see 137% recently) and US goverment is forced to use old known methods :-) They are pressing Japan and China very hard now as any significant move grom them and disaster could come in days.

    >They just print dollars, nothing more

    It is right, in part. As they'll never be able to return this money to Fed.
    But publically telling this will result in sudden death of whole system.

    >They don't owe the money to the FED, but due to a law of 1913 they do.

    This is just some propaganda. US and Fed are functioning under current laws, and they can't say that they don't owe money to Fed, because they owe them :-)