Federal Reserve – the Buyer of ONLY Resort

Posted at 7:03 PM (CST) by & filed under Trader Dan Norcini.

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Dear CIGAs,

I came across the following story in my readings today and quite frankly, was thunderstruck after going through it and looking at the data. I did not think this was possible and am still at a loss to explain it so perhaps some of you math whizzes out there can make it simpler for me. Either way, it is simply mind-boggling!

Here is the title – see if it makes you sit up and take notice as it did me!

Fed Has Bought More U.S. Gov’t Debt This Year Than Treasury Has Issued

Here is the link:

http://cnsnews.com/news/article/fed-has-bought-more-us-gov-t-debt-year-treasury-has-issued

Here are the appropriate links referenced in the article.

http://www.treasurydirect.gov/NP/BPDLogin?application=np

Federal Debt outstanding as of the end of the calendar year 2012:   16,432,730,050,569.12

Federal Debt outstanding as of February 6, 2013:   16,479,954,658,103.57

Amount of Increase in Debt: 47,224,607,534.40

If I did my math correctly, the size of the Federal Debt increased $47.224 Billion since the beginning of the year.

http://www.federalreserve.gov/releases/h41/Current/

Now look at the Fed Balance sheet holdings of US Treasuries over that same period.

Fed Treasury Holdings as of Wednesday, January 2, 2013:     1,666,118 

Fed Treasury Holdings as of Wednesday, February 6, 2013:    1,717,182

Amount of Increase in Fed Treasury Holdings since the beginning of the year:   $51.064 Billion

That is $3.879 BILLION MORE than the US Treasury has issued this year!

Again, I have no idea how this is supposed to be possible but the numbers are what they are. Scotty beam me up. We are freakin’ doomed!

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