What is not mentioned below is that when the Fed buy's treasuries, they create the $s out of thin air and of course we pay them interest on the $bilions for their 10 minutes of "work" on the computer. There seems to me to be stress in the system everywhere I look. It just keeps building.

The US 30 year closed at 3.81% on March 17. This represented quite a rise from little over 2.5% at the beginning of the year. The administration and fed were obviously quite worried about the rising rates on top of the rapidly sinking economy. On March 18 the fed announced their quantitative easing program (to buy $300 billion in treasury securities as well as $700 billion in agencies with newly printed money). This was an obviously high risk step. The clear reason was to stem the rise in interest rates. In the week that included their quantitative easing statement the fed bought $162 billion in US government securities. They don't include that in their $300 billion dollar program, I guess they get a pass cause they make whatever rules they want. In the weeks since the announcement they have bought the following amounts of US government securities, in billions: 13.8, 13.0, 23.4, 62.6 and 94.5. So even if we give them a pass on the 162 billion the week of the announcement, in just over a month our helicopter pilot has already bought $207.3 billion dollars in treasuries. This is over two thirds of the entire buying program in just over a month. Despite this reckless program of Fed bond purchases the rate on the 30 year US bond has broke out to new highs of 3.88%. The ten year is about ready to break out also. The quantitative easing program looks like most government programs. Its a complete failure so it will grow exponentially. Given the sharp rise in rates since the last fed report Wednesday it is likely we will see another big week of fed buying next week. The next step will be too increase the buying (quantitative easing) but lie about it.The bond purchase data are from the weekly federal reserve data bank printed in Barrons magazine.
Steve Silver