Did anyone see this the other day? 22.7% annualised growth to M1 . . . inconceivable! So I gave it some thought and came up with a few potential reasons for the ACTUAL PRINTING PRESSES to be so heavily utilised: 1) Maybe they just hit the use by date on a QUARTER of their currency in circulation. You know how that works, "use by" expires and you print up another 22.7% of your currency in circulation; or 2) Maybe they were stocking up the helicopters for the infamous Bernanke drop! ; or 3) Maybe they were handing over crisp new bills to insiders so they could go buy some Gold on the open market; or 4) Maybe they had to load up a few more C-130 transport planes of cash to bankroll the payroll of their international operations. http://articles.latimes.com/2011/jun/13/world/la-fg-missing-billions-20110613 It will be interesting to see what the growth rate is for this quarter!
Those US Treasury Bonds MUST be sold, no matter what, and NOBODY will buy any except US Pension and investment funds. The Chinese and the Japanese etc sure as hell will not or cannot. That leaves ONE buyer, Mr Ben Bernanke! Ben has to print the Dollars to buy the Bonds, and that means M1 etc goes through the roof. Ben gets the Bonds and the Treasury gets the USDs. And the Governments SPENDS them!!!!! QED
Im pretty sure that I read, that after the downgrade of the credit rating by S&P that US pension funds were no longer permitted to purchase the bonds (or anything rated below AAA credit?
I believe 2 of the 3 credit rating agencies would have to agree before the AAA rating would be lowered. At that point, you could expect the rules to be changed to allow ownership of AA bonds or whatever the US Bonds were then rated. Or the US Government will simply mandate x% of pension plans be invested in US Treasury Bonds. The latter is what I eventually expect to happen.
