>>507752634Buybacks are a mechanism, yes — but when paired with deteriorating buyer demand, they signal one thing:
You’re monetizing your own debt because no one else will.
This is functionally QE whether you call it that or not. Semantics don’t change causality.
“The Fed isn’t doing active QE.”
Correct, not officially.
But:
Reverse repos have plummeted.
SOMA holdings are slowly decaying but remain near peak levels.
Liquidity is being injected through window dressing (e.g., emergency bank funding facilities, Bank Term Funding Program).
So while the Fed claims it's tightening, real liquidity conditions suggest stealth easing. That’s why risk assets are ripping despite high rates.
“Debt issuance and buybacks are normal, not a crisis.”
Yes — when they’re done under healthy demand.
But not when:
Foreign central banks (China, Japan) are dumping Treasuries.
The Fed is the marginal buyer, directly or indirectly.
Yield suppression becomes policy, not market equilibrium.
MMT is simply Treasury printing money and lying about inflation. This is worse because atleast our current system was designed to use use Yields as a barometer and check on our debt, however, we essentially moved away with that through pseudo MMT.