Why the Federal Reserve Will Have to Restart QE Sooner Than Later




from WallStForMainSt

Why will the Federal Reserve Bank of the US have to restart QE sooner than later? The answer is runaway budget deficits and also interest payments on the US national debt (plus running a large and massively growing welfare and warfare state) are taking up a larger and larger share of annual US tax revenues.

The US budget deficit is up 27% and getting closer to $1 trillion. Unfortunately, this is not the real budget deficit. https://www.cnbc.com/2019/08/12/the-u…

According to billionaire bond expert Jeff Gundlach, the US national debt increased by $1.4 trillion dollars in 2018.

However, because on a relative basis, US yields are still higher than elsewhere and many people have copied Stanley Druckenmiller, there’s strong demand for US Treasuries for capital gains: https://finance.yahoo.com/news/debt-c…

Why is the Fed trapped? (Mish Shedlock article) https://moneymaven.io/mishtalk/econom…

Track Annual US Federal Government Tax Revenues Here: https://fred.stlouisfed.org/series/W0…

President Trump & Congress reach a 2 year deal on the debt ceiling: https://www.cnbc.com/2019/07/22/us-de…

US Treasury website tracking portfolio holdings of US & Foreign (Debt) Securities: https://www.treasury.gov/resource-cen…

How much in US Treasuries does China, Japan, etc own? https://ticdata.treasury.gov/Publish/…

Who Owns the US National Debt? https://www.thebalance.com/who-owns-t…

The Fed is worried about veolcity of money picking up after it restarts QE and wants banks to hold onto more reserves and not make more loans after the Fed also cut Interest on Excess Reserves (IOER) along with its 25 basis point rate cut at the end of July 2019: Fed Considers New Tool for a Downturn https://www.wsj.com/articles/fed-cons…

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