Sunday, May 01, 2011

A Chart To Ponder

I fat fingered the data in from the Treasury Department's website. You can click on the image for a better version. The countries chosen are the 5 largest holders of Treasuries.

Question: When QE II ends, that is, when the Fed stops printing unbacked dollars and handing them to the government at the rate of $100B per month, what's going to happen? Note that the magnitude of the borrowing will remain unchanged.

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