The Federal government has achieved financial nirvana and we are all doomed!
The Federal Reserve is currently buying anywhere between 60% and 90% of new treasury debt depending on the auction. Based on the current trajectory (unless QE actually disappears), the Fed will own 100% of 10 year treasury debt by 2018. But since the Fed is not allowed to make a profit on these holdings at U.S. government expense, the Fed actually turns over it's "profits" to the U.S. Treasury Secretary as they accrue. So what does this mean? It means the U.S. is allowed to borrow that magically created Fed money INTEREST FREE. How sweet is that. And taxpayers will never have to summon up their own money to pay the interest expense on all that debt! There is none!
But the Federal government has never paid back a penny of maturing debt in over 40 years so they just "roll it over". Consequently, with this track record the Federal Reserve members infected with their "Princeton degrees' certainly must realize their loans to the Federal Government will never be paid back. Bernanke and team members may gossip about tapering but any joking around about reducing their (at last count $3.5 trillion) balance sheet is exactly that....a joke. Nobody will step up to the plate to buy the Fed's treasury obligations.
Imagine going to the bank to obtain a $500,000 loan to buy your dream house. The loan officer informs you that you will never be charged interest nor do you ever have to repay the principle. Do you call this arrangement a loan...or a gift? Right now the Federal Reserve is handing the government free money and all of us minions of our beneficent government handlers view these free handouts as "quantitative easing". It is nothing more than free money to cover government's over-spending. Once foreign governments wake up and realize their U.S. treasury borrowings based mostly upon trade surpluses (things of value) are competing for new purchases against a bidder who has free (digitally created) money, the gig may be up and the selling floodgates will open.
Bernanke is the "reincarnate" of John Law. And for those of you who do not study history, John Law was credited with starting the French Revolution after destroying France's currency system by issuing massive amounts of non gold backed currency to pay for the French King's need for money to fight a foreign nation. Amazing as it may sound, John law was first a banker and whiz financier in Scotland. However, John Law was charged with murder after killing a man and fled to Europe. He later became the minister of finance for the French King and came up with a scheme to issue currency notes backed by an interest in the "Mississippi Holding company" that attracted huge number of investors (just like the tulip mania in earlier history). The Mississippi Holding Company never earned a dime, was a sham, and everyone lost their investments. A depression immediately set in whereupon the King and John Law were blamed for everyone's misery. And the revolution commenced.
Bernanke doesn't even back his computer generated money with any "backing" whatsoever....unless you call the "full faith and credit" clause viable "backing".
We are doomed......to a currency collapse. And on a positive note...most will survive!
As to who is actually going to pay for all this its the average American in the way of not being able to generate enough return on his investments-savings to nearly keep up with the inflation now and the coming hyper-inflation.. Buy physical gold-silver. IMO