Little known fact is that the Bernank is actually not totally brainwashed into thinking he has to hold the gas pedal down forever.
In fact there was a considerable amount of time last year when he only purchased enough bonds in order to keep the FRB balance sheet stable. And for those of you that are worried that he is irresponsible, the fact is that for a couple or so months last year he even shrank the Fed' balance sheet. Thats right, in other words he did not replace the runnoff that was maturing. The unfortunate thing is that our economy did not prove to be self sustaining and he put into place more QE.
My point being is that there will come a time when QE ends, and though it may seem unfathonable to some, it may actually come at a time while the Bernank is still running the show. I personally do not perceive him to be irresponsible and forsee him ending QE before he retires.
If I were the treasury I'd be issueing mostly 30 year bonds in order to do whats best for the country. They need to lock into these rates while they can still get them.
All these pieces of paper are, issued with as much solemnity and authority as if they were of pure gold or silver... and indeed everybody takes them readily, for wheresoever a person may go throughout the Great Bernank's dominions he shall find these pieces of paper current, and shall be able to transact all sales and purchases of goods by means of them just as well as if they were coins of pure gold
Mr S: "If I were the treasury I'd be issueing mostly 30 year bonds in order to do whats best for the country. They need to lock into these rates while they can still get them"
Without a doubt. Assuming they could issue without moving the current market rate up (which of course they could not at least to some degree), the wisest thing to do would be to double or triple the national debt ceiling, issue 30-year debt to the max, and then buy it all back at 25 cents on the dollar five or six years from now when rates move back to a more normal level.