Is The Fed Funding The Treasury Through The Banks?
Tom in Georgia pointed me to a great piece over at Zero Hedge on bank financing of the Federal Reserve. Tom's comment: "This article has a good explanation of how the Fed may be continuing Quantitative Easing 2.0 while publicly proclaiming that it isn't. The banks are using their cash reserves received from the Fed to now buy 10 and 30-year T-bills rather than the Fed purchasing them outright. This plausibly explains how the US bond market and equities can rally, while funds experience massive outflows all at the same time. The government Ponzi scheme continues."
