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THE DARK POOL OF THE FED

Happy New Year: Hapless, hopeless and penniless American peasant.
 
And you think Goldman Sachs has “dark pools”. The color of all that darkness, it's dark green and it’s not algae. Those pools are so dark because you can’t see the bottom for all the green money floating in them.
 
This is from Sprott Asset Management. These are speculative questions raised by the Z1 Fed report covering exactly who is buying all those bonds at the weekly “over-subscribed” bond auctions:
 
“In the latest Treasury Bulletin published in December 2009, ownership data reveals that the United States increased the public debt by $1.885 trillion dollars in fiscal 2009….
 
To our surprise, the only group to actually substantially increase their purchases in 2009 is defined in the Federal Reserve Flow of Funds Report as the "Household Sector". This category of buyers bought $15 billion worth of treasuries in 2008, but by Q3 2009 had purchased a whopping $528.7 billion worth.
 
Money Market funds have been NET SELLERS all year long, and in Q4 the rate of selling has dramatically increased, mostly as a consequence of broker/dealer sales. 
 
…we have more than $500 billion in further discrepancies that make absolutely no sense, especially when one looks at the rest of the patterns in the Fed’s most-recent Z1 release.
 
Who really "bought" that Treasury debt - and did it really "subscribe"?
Or is the truth that there were in fact no buyers for upwards of half of the total Treasury issue in the last year and it was instead monetized - one third openly via Federal Reserve "open market" purchase, and the other two-thirds via "covert" or "stealth" means, complete with bucketing the alleged "buyers" into categories in The Fed’s and Treasury’s data releases…”
Me again. So individual “HOUSEHOLDS” are the net buyers of all the bonds floated? This is not only hard to believe it’s laughable. Even if the entire household saving going on was devoted to purchases through savings accounts, most notably Money Market accounts it would not match these figures. And, as Sprott notes money market accounts are net sellers of Treasuries in the last three quarters of 2009.
Or, is it the great secret gift of 2009? The Uncle Sam is buying treasuries and bonds and putting them in each of our names for a big New Years gift? Think of it, 500 grand plus in each and every citizen’s bank account! Or, is it the great shell game played by our “dark pool” government and the “independent Fed” to hide how they are really, (not) financing the huge increase in money supply. You guess, 2010 should be a really fun year. Enjoy.

Disclosure: none