- The Federal Reserve and the federal government are attempting to "plug the gap" caused by a slowdown of private credit/debt creation.
- Non-US demand for the dollar must remain high, or the dollar will fall.
- Demand for US assets is in negative territory for 2009
- The TIC report and Federal Reserve Custody Account are reviewed and compared
- The Federal Reserve has effectively been monetizing US government debt by cleverly enabling foreign central banks to swap their Agency debt for Treasury debt.
- The shell game that the Fed is currently playing obscures the fact that money is being printed out of thin air and used to buy US government debt.
The Federal Reserve is monetizing US Treasury debt and is doing so openly, both through its $300 billion commitment to buy Treasuries and by engaging in a sleight of hand maneuver that would make a street hustler blush.
This report will wade through some technical details in order to illuminate a complicated issue, but you should take the time to learn about this because it is essential to understanding what the future may hold.
One of the most important questions of the day concerns how the value of the dollar will fare in the coming months and years. If you are working for a wage, it is essential to know whether you should save or spend that money. If you have assets to protect, where you place those monies is vitally important and could make the difference between a relatively pleasant future and a difficult one.
There are three major tripwires out there, any of which could rather suddenly change the game, if triggered. One is a sudden rush into material goods and commodities, occurring if (or when) the truly wealthy ever catch on that paper wealth is a doomed concept. A second would occur if (when) the largest and most dangerous bubble remaining, government debt, finally bursts. And the third concerns the dollar itself.
In this report, we will explore the relationship between those last two tripwires, government debt and the dollar. » Read more