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Wednesday, August 11, 2010

1 thing I do not understand

The Fed. Reserve indicated they will use the proceeds of the MBS program to purchase treasuries.

I have been thinking about this since I heard it. Combed the media outlets last night, to get multiple opinions on it, but I am still scratching my head.

In the current environment, I just do not see the need for them to do this. There has been healthy demand for US treasuries, I do not see why they would add on-top of the already excess demand. (Or even create more demand by making that statement.)

Ben B. is not a stupid man. Especially after his first few months in the head of the Fed. Everything they do is calculated, and has a purpose. IMO, he has earned that reputation since taking leadership of this crisis.

So why would they make a statement like that?

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