Bloomberg: There's a new class of Bondholders called the Fed
above the rest. Everybody else takes one notch below his former standing, if the Fed comes purchasing. The rest of the worlds bondholders are subordinate to FED BONDS, their coupon may be curtailed, the preferred divvy is cut, the common divvy gone (as if it mattered).
So far, the whole gambit is to find a buyer for the 230B debt in Sept.
If furriners don't buy, US will buy, but all other debt in the world, preferred and common will take a back seat.
Money is money, from tax payer or not making no difference. If the government wants to be senior to everyone else, it better takes more risk or liability too. Otherwise, investors will be not fooled. Have they learned enough from Hope-Now and Super-Fund?