by ubercrap » Mon 23 Mar 2009, 10:56:06
$this->bbcode_second_pass_quote('bodinagamin', '')$this->bbcode_second_pass_quote('smiley', '')$this->bbcode_second_pass_quote('smallpoxgirl', 'T')his is a very normal activity by the fed. They regularly buy treasuries using created money. Controlling whether they're buying more treasuries, or letting the treasuries they have expire is one of the biggest tools they use to control the money supply. You can argue that the money supply is too big or too small, but getting upset about the fed buying treasuries is just silly.
The fed has bought treasuries in the past, but the amount and the time in which they are going to buy them now is way beyond anything they have done before. They are going at it Japanese style.
This is not normal and a dollar drop of 5% in 24hrs is ample proof that the rest of the world does not consider this business as usual.
Although I do not reccommend to get "upset" about it, (as there are much greater things in life than watching the ticker at CNBC, and the fate of the Mogambo should serve as a warning to us all,) it certainly wouldn't be silly to poor yourself a good glass of single malt and ponder on what might be considered a very significant day by future historians.