POMO: Yes Virgina, the Fed does go both ways.

Zerohedge points out that the Fed will actually be buying and selling US bonds at the same bloody time.

This literally could not be funnier. You couldn’t make this stuff up if you tried. The Federal Reserve is acting out a long lost Monty Python movie in realtime here.

Following today’s unprecedented POMO failure due to “system difficulties” (one would hope the Fed’s POMO machine does not start and stop every time someone pulls the plug from the socket), Brian Sack’s team (not to be confused with the PWG team of Eric Mindich) had to reschedule the literally failed auction. As it turns out, the first opportunity to sell $8-$8.75 billion in 2013 bonds is on December 2. And unlike the December 21 “reverse” POMO which is due to take place at 1:15pm, the rescheduled bond sale will instead occur at its usual time of 10:15-11:00am. Ironically, this is also the time when the Fed will be buying $2.25-$2.75 billion in 2036-2041 bonds. In other words, for the first time ever on Friday the Fed will be literally selling and buying bonds (although selling 4 times more than buying) at the same time. If this is not the pinnacle of deranged monetary policy which does not even attempt to offset monetization by a few hours, then nothing ever can be.

Really guys? Really?

I weep for the future present.

 

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so, let’s talk about this

From Zerohedge…

First, oh shit!

Second, not really a surprise.

Like the initial monetization of our debt by the FED almost three years ago, this will mark a waypoint on the path to our eventual collapse. And yes Mrs. Matson, it can happen here.

As such, all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.

Not sure that I am 100% on the bandwagon with the hyper-inflation crowd, but it is an interesting idea to say the least.

Dear readers, these kinds of things lead to war on a macro scale.