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PostPosted: Wed 08 Sep , 2010 7:23 pm 
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Dave_LF wrote:
What does the Fed do with bonds once it buys them? Sit on them until the government has more money (i.e. forever)?


Well, under normal circumstances, when the Fed buys government bonds, it sells them to other parties. You cannot directly buy a government bond from the government.

But if the Fed cannot find buyers it will sit on them. That's called "monetizing the debt", and it is a late stage economic collapse event. At that point those of us who saw the early stage events can say "I told you so", except we won't be heard. We'll get blamed instead.

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Last edited by Cenedril_Gildinaur on Tue Feb 30, 2026 13:61 am; edited 426 times in total


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PostPosted: Wed 08 Sep , 2010 7:52 pm 
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Unfortunately I can't read your article because registration is required. What indicates that the Fed is planning on sitting on the new batch as opposed to selling them to the public? Or are you just certain that there aren't enough buyers for the volume they're planning to acquire?


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PostPosted: Wed 08 Sep , 2010 9:14 pm 
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The alarming part, in my opinion, is that he is suggesting that the Federal Reserve will do it if necessary. The paragraph I quoted shows that he's considering it.

He's doing a balancing act. He wants to keep the value of the Treasuries up and the interest rate low, but the government is poised to flood the market. Although the article doesn't mention a lack of willing buyers, the fact that he's considering monetizing the debt indicates that he is thinking it.

As for the article, try to reach it through Google if you want the whole thing. Every time I click on the link I get the registration page, but if I go through Google (use the headline) I get the whole thing. Most of it is fairly dry.

Bernanke wants to do Quantitative Easing to stimulate the economy, but doesn't dare do so while commodity prices are high, especially precious metals. He doesn't want too much inflation, but that's really his last remaining tool unless he gives up and lets the market do its own thing.

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It is a myth that coercion is necessary in order to force people to get along together, but it is a persistent myth because it feeds a desire many people have. That desire is to be able to justify hurting people who have done nothing other than offend them in some way.

Last edited by Cenedril_Gildinaur on Tue Feb 30, 2026 13:61 am; edited 426 times in total


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PostPosted: Thu 09 Sep , 2010 11:28 pm 
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Shit, I wanted at least one more year.

Treasurys Tumble Following Weak 30-Year Sale

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It is a myth that coercion is necessary in order to force people to get along together, but it is a persistent myth because it feeds a desire many people have. That desire is to be able to justify hurting people who have done nothing other than offend them in some way.

Last edited by Cenedril_Gildinaur on Tue Feb 30, 2026 13:61 am; edited 426 times in total


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PostPosted: Fri 17 Sep , 2010 7:46 pm 
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I found out today that one of the chemicals I buy for our company had a recent price increase of $2.00/lb. That's enormous in this industry. Usually the prices go up a 5 cents a lb, or 10, or sometimes even 15 cents a lb. But this time, for this chemical, it was $2.00 per pound! :shock:

Shudders of reaction through the whole company. The sales manager needed an immediate cost of goods report for the product we make with this chemical, and we decided to stock up as much as we could afford before the price increase takes effect in 2 weeks. Some of our customers probably will decide to buy cheaper floor sealers now. :nono:

It's been scary this year merely because of the shortage of raw materials. Items that used to be delivered in a week or two are now taking a month or two. You just can't get some stuff within the time frame you need it anymore. Everyone is scared to carry much stuff in stock, so it trickles downhill something awful. We've increase our lead times for ordering by double and then triple, and we are still getting bit by slow deliveries.

And now the steady stream of price increases are suddenly magnified out of all previous experience. This can't be a good sign. :(

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PostPosted: Fri 17 Sep , 2010 9:05 pm 
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What's the chemical and what's the vendor's excuse?

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PostPosted: Fri 17 Sep , 2010 9:11 pm 
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It's one of many resins we use in making floor sealers. All the resins have been going steadily up in price the past few years and most of them have been harder and harder to get. Pigments are the same way. I've been told that with the economy the way it is, no one wants to keep much stock on hand, and when there are several layers of manufacturers or distributors between you and what you want, it can add quite a few days to acquisition time.

We literally have hundreds of chemicals we buy. That's why a two dollar increase is so shocking. Increases are *always* in small fractions of a dollar, not whole dollars.

Lots of them are petroleum based. That might have something to do with it.

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PostPosted: Sat 18 Sep , 2010 12:50 am 
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Electronics manufacturers are in the same fix. Some of the parts we use have 30 month lead times right now. So everyone's buying and hoarding as much as they can, which only makes things worse.


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PostPosted: Sat 18 Sep , 2010 1:45 am 
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Ashpalt, steel and concrete went up a few years ago, by a large amount.
China out bid the US on most of it, so the demand went up and then the price.

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PostPosted: Wed 02 Feb , 2011 9:07 pm 
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Fed passes China in Treasury holdings

China is once again the 2nd largest holder of US Treasury bonds.

The number one is the Federal Reserve. We are officially monetizing the debt.

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It is a myth that coercion is necessary in order to force people to get along together, but it is a persistent myth because it feeds a desire many people have. That desire is to be able to justify hurting people who have done nothing other than offend them in some way.

Last edited by Cenedril_Gildinaur on Tue Feb 30, 2026 13:61 am; edited 426 times in total


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PostPosted: Thu 28 Apr , 2011 4:40 pm 
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Not quite as good as the first, but the symbolism of the boxing match (and who was declared the winner) is pretty spot on.

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It is a myth that coercion is necessary in order to force people to get along together, but it is a persistent myth because it feeds a desire many people have. That desire is to be able to justify hurting people who have done nothing other than offend them in some way.

Last edited by Cenedril_Gildinaur on Tue Feb 30, 2026 13:61 am; edited 426 times in total


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