FRAUD: Federal Reserve Is Selling Put Options On Treasury Bonds To Drive Down Yields

Idiotic, "Selling put option on debt, and if debt prices collapse he says they would cost you nothing since they would become worthless!"


Selling a put = being long.
If the instrument you sell puts against drops you are required to purchase that instrument.

Too many people have become bankrupt following that strategy. It is the opposite of what the Black swan proposes.

You buy puts since they are very cheap. Something like buying the 40:1 at the races. You seldom win but when you do you win big.

That guy is completely clueless....

I'm on my iPod can someone explain what this means?

,,,it is an option proposed back in 2005 to lower long term interest rates. Obviously Bernanke used the latter buy directly BUYING treasuries to lower long term i rates. IE CALLED QE 1 and now QE 2!!!!

Selling Put Options could be very disruptive since they expire. They could be very costly to the fed if exercised.

Buying the actual Treasuries like Bernie has done does not force him to sell. He has indicated that he would hold them to maturity, that is 10 to 20 years!!! If he sold treasuries that he purchased yielding 2.5% (Like he did in December) He would create huge real losses at the fed. So the risk of him selling is null. That Fed Balance sheet has ballooned and it will stay that way for a long long time.

Ordinarily, the Fed changes interest rates and the Treasury prints money. But with interest rates near zero, the Fed looked for a new strategy to make loans attractive

Quantitative easing is simply printing more money. Normally the Federal Reserve buys government bonds passively to maintain its interest-rate target. With quantitative easing the Fed aggressively buys government bonds and other securities in large quantities.

[link to www.csmonitor.com]

One scam scamming another scam.

The rats are eating each other.

Okay, so what are the effects of this and when will it happen?

Idiotic, "Selling put option on debt, and if debt prices collapse he says they would cost you nothing since they would become worthless!"

Selling a put = being long.


No, I said, "And even if you go bankrupt and default your debt, the put options would become worthless, costing you nothing."

Bankruptcy wipes out all debts, including the obligation to make good on any put options.