WSJ: Fed Buying 61 Percent of US Debt; Egan-Jones Downgrades U.S. Credit Rating

Julie Crawshaw and Forrest Jones
Moneynews
28 Mar 2012

The Federal Reserve is propping up the entire U.S. economy by buying 61 percent of the government debt issued by the Treasury Department, a trend that cannot last, Lawrence Goodman, a former Treasury official and current president of the Center for Financial Stability, writes in a Wall Street Journal opinion article published Wednesday.

“Last year the Fed purchased a stunning 61 percent of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis,” Goodman writes.

Goodman also warns that U.S. economy and markets are “at risk for a sharp correction” if conditions aren’t “normalized.”

“This not only creates the false appearance of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.”…

…Fed intervention in the government debt market makes demand for Treasury bonds appear higher than it really is, as foreign creditors and other investors have fled U.S. government debt instruments and are looking elsewhere until the government makes serious attempts to curb spending and narrow its gaping deficits…

Read the entire article at Moneynews.com

Related:  Egan-Jones Downgrades U.S. Credit Rating and more at Bloomberg

Update: Obama Orders Press Blackout After US Credit Rating Cut

A shattering report from RIA Novosti’s Washington D.C. bureau appears to prove that the mainstream press in America has become nothing more than a propaganda arm of the Obama regime when during a White House news briefing this past week they were effectively ordered not to report on this past weeks credit rating cut of US government debt.

The Russian International News Agency (RIA Novosti) is a Russian state-owned news agency based in the capital Moscow…

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