Pimco’s El-Erian thinks Fed to monetize more U.S. debt through treasury purchases

June 12, 2009 by · Leave a Comment
Filed under: Opinion 

Surprise, surprise.  Like we didn’t see this coming.  Interest rates are right back up to the previous levels that was crushing the housing market.  Unless something is done, what should happen, will happen and that means more foreclosures and the lowering of home prices.  Ben Bernanke testified that the Federal Reserve would “not” monetize any more debt that it had already committed too, but I don’t see how that is possible unless we are going to raise interest rates enough to get the foreign participation of investors the U.S. government will need to soak up the trillions of dollar of new debt we will be issuing.

News (Reuters):

The rapid rise in bond yields will force the Federal Reserve to “engage again” in the purchases of U.S. Treasuries and mortgage-backed securities, Mohamed El-Erian, the chief executive of bond giant Pacific Investment Management Co., said Friday.

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Federal Reserve to Buy $300 Billion of Longer-Term U.S. Treasuries to monetize the debt

March 19, 2009 by · Leave a Comment
Filed under: Policy News 

Wow, this rocked the markets, value of the dollar and gold bullion.  This is a sign of bad things to come, we now have our central bank buying our debt to monetize it because our bailout policies have shaken the confidence of the foreign investors that would normally buy our debt.   Unless we see a turn around soon, I think the dollar is now in its final decline.  I am very worried about this development.  Be Safe.

News:

The Federal Reserve opened a new front in its battle to bring down borrowing costs across the economy, pledging to buy as much as $300 billion of Treasuries and stepping up purchases of mortgage bonds.

The announcement following the Federal Open Market Committee meeting today in Washington spurred the biggest rally in longer-dated Treasuries in decades. Officials unanimously voted to expand the Fed’s balance sheet up to $1.15 trillion, and said they may broaden a program aimed at boosting consumer loans to include other assets, today’s statement showed.

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