Dumping Short Dated Paper is QE3? The Fed has 1.2 Trillion at least by their own admission in short dated paper, they are buying 400 billion in Long Dated Paper. Does this look like Zimbabwe aka Helicopter Ben in motion to you? They dump 1.2 Trillion of Short Dated Paper into the market what will be the effect? The Fed is a consortium of banks so that holds this paper on their balance sheets, so the banks are raising cash, as in dumping short dated paper, for a 2/3 less long dated paper? 1.2 Trillion Short Dated paper for 400 Billion Long Dated paper. By next June. So this is a flood of cash?
My question is: Just who is buying all the short term paper?
Who has that much money and since its short term and if there are no buyers then that means Uncle Sam must come up with the money. Right?
Let me rephrase my question... Who will the FED sell its short term paper to?
If FED is forced to sell the short term paper then in effect short term interest rates will rise and if short term interest rates rise higher than long term rates then the yield curve becomes inverted...
And every time the yield curve inverts then a recession ensues...
Help me understand as to what the heck is gong on.