And they wonder why no one showed up for the Treasury Auction?
Geithner "open" to China proposal
Geithner, at the Council on Foreign Relations, said the U.S. is "open" to a headline-grabbing proposal by the governor of the China's central bank, which was widely reported as being a call for a new global currency to replace the dollar, but which Geithner described as more modest and "evolutionary." (more)
Fed Begins Buying U.S. Treasuries
by Bill Bonner
Write in your diary...save today's newspapers...remember what you did today. Most historians won't even notice, but today is a big, big day.
Today is the day the Fed begins buying U.S. Treasuries. Britain is doing it already. So is Japan. Why shouldn't we? What's a few trillion extra...just between friends?
The scope of the project is immense.
Do you remember how it works, dear reader? When you buy a U.S. Treasury bond, you pay for it with real money - or, at least as real as dollars get. Money changes hands. No net increase in the money supply. But when the Fed buys a Treasury bond it creates the money to buy it...and thus the money supply increases. It's called "monetizing the debt" - or converting debt into currency. Given the size of upcoming Treasury purchases, the total size of the U.S. monetary base is expected to increase 500% in the months ahead.
Is there any doubt what this will mean to the dollar? To the price of gold?