The Fed's Printing Press Funds Government Deficit

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RECENT POSTSCurrent DateTime: 10:57:42 04 Nov 2010LinksList Documentid: 27913298Expiration DateTime: 11/4/2010 11:00:38 AMHalftime"”Pro Traders: What's the Next Stop for Oil?Halftime: S&P "“ Next Level Of ResistanceFed's Printing Press to Fund Deficit for 6 MonthsYour First Move For Thursday, Nov. 4Options Action: OpenTable4 Retail Trades Ahead of Same-Store SalesIs the US Strung Out on Easy Monetary Policy?Web Extra: Roll Dice On Casino Stocks?FAST MONEY FEATURESFAST MONEY POLLGet in the post game.  Respond to our "Question of the Day" right now.TRADE SCHOOLGrab a pencil because school is in session and the Fast Money traders are teaching class.FAST MONEY PODCASTSDownload Fast Money onto your MP3 Player.FAST MONEY WIDGETGrab this all-in-one application and get recaps of the show sent right to your desktop or blog.SHOP FOR FAST MONEY MERCHANDISEGet your game on with Fast Money gear.FAST MONEY PHOTOS!Check out our scrapbook.  These "pix" are guaranteed winners.NEWSLETTERSign up and receive a daily email from the Fast Money team!FAST MONEY MOBILE ALERTSGet advanced information about the next Fast Money.setDefault('cnbc_textbody');Fed's Printing Press to Fund Deficit for 6 MonthsPublished: Thursday, 4 Nov 2010 | 12:17 PM ET Text Size By: John MelloyExecutive Producer, Fast Money

To find a buyer of all the government debt he's printing, Treasury Secretary Tim Geinthner doesn't need to travel to China, just walk a mile over to the Federal Reserve building.

With the Federal Reserve set to print $600 billion in order to buy Treasury securities, it is essentially funding the $1.2 trillion deficit for the next six months, according to Ed Yardeni, President of Yardeni Research. It's even more if you count the reinvestment of proceeds from its mortgage-backed securities portfolio.

"You essentially have the world's largest hedge fund down the street from the world's largest prime brokerage,"� said Yardeni, who has held positions at both the Federal Reserve and the U.S. Treasury. "I think that QE-2.0 is a very bad idea because it increases the odds of a trifecta of bubbles in stocks, bonds, and commodities."�

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This concern wasn't on the mind of global investors today, who bought up just about everything except the U.S. dollar. The S&P 500 .SPXloading...     Read Full Article »

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