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Fed Holdings – Robbing Timmy to Pay Timmy
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
tfmarketadvisors.com / by Peter Tchirp / September 9, 2012
I focused on bonds issued by the Treasury that pay a fixed rate coupon. I didn’t focus on t-bills, as the Fed seems far less involved in those, and they all yield zero anyways. I didn’t include TIIPS for now, because the distribution, off-hand, looks similar, they are smaller, and I was too lazy to do the math on the coupon for those on a Sunday morning.
| Maturity | Treasury Nominal | Fed Nominal | Fed % |
| < 2 | 2,598,633,000,000 | 48,811,404,254 | 1.9% |
| 2-5 | 2,710,660,000,000 | 442,880,376,891 | 16.3% |
| 5-10 | 2,036,622,000,000 | 765,304,233,375 | 37.6% |
| > 10 | 944,989,000,000 | 315,225,160,250 | 33.4% |
| Total | 8,290,904,000,000 | 1,572,221,174,770 | 19.0% |
Nothing new here as it shows that the Fed has used Operation Twist to extend the maturity of their holdings and that from 5 years out, the Fed is the DOMINANT player in the market. They have been sucking out the supply.
The front end is less affected by the Fed purchases (since they hold less), but ZIRP lets banks and others buy the short end with almost no risk of loss so they don’t need to buy there anyways.
Thanks to BrotherJohnF
2012-09-09 20:56:15
Source: http://silveristhenew.com/2012/09/09/fed-holdings-robbing-timmy-to-pay-timmy/
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