Look at this story from Bloomberg and Reuters regarding how the FED is buying TIPS
Here is an excerpt from the Bloomberg article:
The central bank bought $1.55 billion of Treasury Inflation Protected Securities, or TIPS, yesterday. The Fed plans to purchase as much as $300 billion in U.S. debt by October to limit increases in mortgage rates and other borrowing costs.
Here is the same story from Reuters:
NEW YORK, May 26 (Reuters) – U.S. Treasury debt prices weakened further on Tuesday after the Federal Reserve bought $1.55 billion of the $8.52 billion of Treasury Inflation Protected Securities (TIPS) dealers had submitted.
The benchmark 10-year Treasury note’s yield, which moves inversely to its price, rose to 3.46 percent <US10YT=RR>, from 3.45 percent shortly before details of the Fed operation. (Reporting by John Parry; Editing by Leslie Adler)
The FED buying TIPS (inflation protected bonds) with money it has just printed (printing money causes inflation)………am I missing something?
Here is what Schiff has to say (bear with the first few minutes of the clip):
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The FED resorting to these tactics suggests that there is considerably more downside to come in the USD Index over the coming days/weeks/months! We are sticking with UDN and TBT!
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