The Federal Reserve will end its program of buying $600 billion in Treasury bonds in June as originally planned, the Fed’s policy committee said Wednesday after a two-day meeting.
The thing is more complicated than my headline. For decades, every dollar printed is borrowed from the Federal Reserve at interest. That is a large portion of the National Debt. In addition the government has borrowed money through the issuance of Treasury Bills, Treasury Notes and Treasury Bonds. Individuals and institutions have been able to purchase and trade these and the government (read Tax Payers) has been liable for the payment of principal and interest on these debt securities. Other nations, most importantly China, buy the securities as well. Recently the Federal Reserve has been buying the bonds, creating a sort of double whammy since we’re still paying interest on the paper money in circulation. This is going to make it harder for the system to stay afloat as the dollar will lose value after these purchases stop in June.
It needs to crash. And when it does we need to develop a new system independent of the World Bank and IMF and the Federal Reserve.