The Fed must taper at this point, given the lack of available collateral (and the decline in issuance of Treasury and "safe" Agency securities). We are indeed in strange times, as if the black hole of QE and associated bond purchases is beginning to eject matter via the quasar of Fed tapering. The consumption, storage, and ejection of all this financial matter is one of my major interests at the moment.
The interesting part is defining what the "matter" is...a zero interest note (dollars) or some "debt instrument" that accrues dollars via some future rate schedule?
Once of the themes of this blog is "what ramifications are produced when a world is run by a fiat currencies". This is an unpredecented experiment in geo-political cooperation, and can be generally thought of as a treaty between the G20 nations.
Of course, treaties are always broken.
Billions and Billions...indeed.
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