Or do you really think Bernanke should have the Fed not buy all that debt and lets see if the bond market can absorb it all....and if not take the rather nasty fall out?

BTW, note on what was bought:

In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve's balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.

Most was apparently agency-backed MBS rather than purely financing "debt."

No goal posts have moved, I linked approvingly to an article by Niall Ferguson and my only real dispute was the claim that all economists are slaves to Keynes. I largely agreed with the rest of his analysis. There wouldn't be the problem if it weren't for the massive spending increases.

Literally there wouldn't be a problem? The Fed balance sheet itself has no risk to bond-holders or to future inflation?

Or do you really think Bernanke should have the Fed not buy all that debt and lets see if the bond market can absorb it all....and if not take the rather nasty fall out?

I think that Bernanke's plan has about half our risk, the other half is the government debt. I think Obama's game plan, like Bernanke's, relies on a lot of things happening just right.

Or do you really think Bernanke should have the Fed not buy all that debt and lets see if the bond market can absorb it all....and if not take the rather nasty fall out?

But look on the bright side. You'll have big shoulders when all is done.....

So were you lying in your opening post or lying now? If you really did read it, why did your opening comment try to play it that there was no mention of quantitative easing? Why did you fail to note that the linked article mentions the tug of war between fiscal and Monetary policy?

Don't move the goalposts .. unless, wait, that's all you have. Spin spin spin.

Drew, read it again. What I said about Steve's original post was true. He just shifted at the last minute to my position, and then claims he's ahead of me in having it.

It's amazing how many times he pulls this stunt, and how the skimmers fall for it.

This is what Steve wrote in his original post, and not what was buried in his referenced articles:

The bottom line is that it appears that the bond market participants are looking at the projections for [spending], deficits, and national debt for the U.S. and thinking it is too much. That in the end, the U.S. will end up monetizing its debt and printing lots more money and driving up inflation.

The bottom line for "bond market participants" was "[spending], deficits, and national debt" ... except when it wasn't ... except when Steve moves his position.

odo, you've dug yourself about a 20 foot deep hole.

Throw the shovel away......

I'll just point out again that Steve plays the Drudge card:

Bond Vigilantes Confront Obama as Housing Falters

Oh and just to point yet again Odograph's less that stellar record at getting the facts right. That was not my title (Bond Vigilantes), nor was it Drudge's title. It was the title of the Bloomberg article. I've already explained why I linked to it, which Odograph omitts here (sauce for the goose Odograph...two can play this game). And the term Bond Vigilantes is not even a Bloomberg creation, but goes back to 1984.

“The bond-market vigilantes are up in arms over the outlook for the federal deficit,” said Edward Yardeni, who coined the term in 1984 to describe investors who protest monetary or fiscal policies they consider inflationary by selling bonds. He now heads Yardeni Research Inc. in Great Neck, New York. “Ten trillion dollars over the next 10 years is just an indication that Washington is really out of control and that there is no fiscal discipline whatsoever.”

Must be a Right-wing Republican stooge.

However, Clinton had a similar incident with bnd markets, and James Carville has been quoted as saying,

Clinton political adviser James Carville said at the time that “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”

To Odograph it was a quick hit piece on Obama. In actuality what started out as a post on an unusual article pointed out the problems Obama is going to run into unless he reconsiders his spendthrift ways.

I read Ferguson's post before you put it up.

So were you lying in your opening post or lying now? If you really did read it, why did your opening comment try to play it that there was no mention of quantitative easing? Why did you fail to note that the linked article mentions the tug of war between fiscal and Monetary policy?

It also strangely ignores Bernake's Quantitative Easing plan, in which Bernake (the Fed) has become a purchaser of long-term governemnt debt, in competition with bond investors, bidding up rates.

You do realize that quantitative easing doesn't have to mean the Fed buys government debt, right? It is buying government debt because that way there is a guaranteed buyer as opposed to hoping there is a private foreign government to buy the bonds. Given the massive increase in the bond issuance due to the massive increase in the deficit that is indeed a concern. So once again, it is both. Fiscal and monetary policy, and the fear is monetizing the debt.

I never said it was "just the stumulus and just the quantitative easing," though I think it's interesting that others rank that portion so highly.

You have pointedly ignored the other factors involved. Further, when it is brought up by me you keep accusing me of "presidentializing" it as if President Obama has had absolutely no role at all.

All I want is a rounded view in the political blogs like OTB.

I don't believe you here either.

I don't think they should just pull the old "Obama's deficit" chestnut out at every opportunity, and leave those other issues to the fine print, in article referenced, but as something not discussed.

But that is just it, yes quantitative easing can lead to inflation, even hyper-inflation, but this is even more so when it is government debt the Fed is buying up vs. other types of debt. It is, in effect, printing money to give to politicians to go play with. Politicians tend to have a rather bad history of being frugal and wise when spending other people's money.

I would also point out your intellectual dishonesty when it comes to the seekingalpha article. Lets suppose you are right. I'm focusing too much on Obama's spending, and not enough on the Fed's actions. The seekingalpha article though goes in the opposite direction. It doesn't mention the other spending at all and has no link to an article that it does (unlike me). So in a way it is more biased than I am. Yet you consider that to be accurate. Because it fits with your view of the situation. If we assume all of the above you are just as much of a dishonest hack as I am.

My actual view is that it is the whole situation. Fiscal and monetary policy are getting into an area that could be very bad if something isn't done. I don't think it is wise that the Fed simply not buy gov't debt. However, Obama could reign in his grandiose schemes to re-assure bond markets that he is aware of the issue...much like Clinton had to do back during his tenure as President.

In future Steve, if you want to call me an idiot, find something I'm actually wrong about.

I never said it was "just the stumulus and just the quantitative easing," though I think it's interesting that others rank that portion so highly.

All I want is a rounded view in the political blogs like OTB. I don't think they should just pull the old "Obama's deficit" chestnut out at every opportunity, and leave those other issues to the fine print, in article referenced, but as something not discussed.

... maybe that's a little much to ask.

Note that 12:27 pm comment tells you the things in his referenced article that he didn't tell you in his post, because they did not support his "Obama’s massive spending" story line.

Right, which is why I told people reading my post to read the entire Fergeson article. Becuase I'm trying to hide that part. Egads, you've found me out.

I think that starts sounding like what I said, a fuller and less politicized and Presidentialized view.

No. If it was just the stumulus and just the quantitative easing I don't think we'd see the run up in bond yeilds. At least not to the extent we are seeing. You want to leave out the rest of the trillion dollar deficit this year, the 10 trillion for the next 8 years or so, and the issues with Medicare and Social Security. It isn't what you are saying, you want to blame it all on monetary policy when it is both. Like I said, go read the article by Ferguson.

Just now he says:

In other words, it isn't just quantitative easing or the stimulus that is the problem here, although they are contributing factors. There is the fact that Obama's spending plans incorporate quite a bit of spending aside from the stimulus and what the Fed is doing. When take together it implies higher inflation.

I think that starts sounding like what I said, a fuller and less politicized and Presidentialized view.

I'll just point out again that Steve plays the Drudge card:

Bond Vigilantes Confront Obama as Housing Falters

Meanwhile, the investors are over on my emphysis:

Bond Market to Bernanke: Take Your Foot Off the Accelerator

The article does in fact reference quantitative easing,

Credit for averting a second Great Depression should principally go to Fed chairman Ben Bernanke, whose knowledge of the early 1930s banking crisis is second to none, and whose double dose of near-zero short-term rates and quantitative easing – a doubling of the Fed’s balance sheet since September – has averted a pandemic of bank failures. No doubt, too, the $787bn stimulus package is also boosting US GDP this quarter.--emphasis added for those who need to work on reading comprehension

In short, Odograph didn't read the link he is bitching so much about.

The article goes on,

But the stimulus package only accounts for a part of the massive deficit the US federal government is projected to run this year. Borrowing is forecast to be $1,840bn – equivalent to around half of all federal outlays and 13 per cent of GDP. A deficit this size has not been seen in the US since the second world war. A further $10,000bn will need to be borrowed in the decade ahead, according to the Congressional Budget Office. Even if the White House’s over-optimistic growth forecasts are correct, that will still take the gross federal debt above 100 per cent of GDP by 2017. And this ignores the vast off-balance-sheet liabilities of the Medicare and Social Security systems.

In other words, it isn't just quantitative easing or the stimulus that is the problem here, although they are contributing factors. There is the fact that Obama's spending plans incorporate quite a bit of spending aside from the stimulus and what the Fed is doing. When take together it implies higher inflation.

Is there any reason to pay anymore attention to Odograph who is either a liar or an ignorant fool?

Well, there's no particular reason fiscal policy should cause inflation if the debt isn't monetized.

Ferguson could take that on. Note also that this investment blog thinks its about Bernanke:

Bond Market to Bernanke: Take Your Foot Off the Accelerator

http://seekingalpha.com/article/139656-bond-market-to-bernanke-take-your-foot-off-the-accelerator