@andrew: It’s a great idea, this and Yves Smith’s comments might do a world of good. . . Now, if someone would just invite them to sit down with some Treasury officials. . . :>)

David, I fully agree (as with your other points).
However, I do not see it happening.

Why would we save when others electronically ´print´ money to buy our debt?

See todays Bloomberg News:
¨Indirect bidders, a group of investors that includes foreign central banks, purchased 45 percent of the $1.917 trillion in U.S. notes and bonds sold this year through Nov. 25, compared with 29 percent a year ago, according to Fed auction data compiled by Bloomberg News.¨

Please note that last year the amount auctioned was much lower (so foreign central banks bought a much lower percentage of a much lower total).

Please also note that all of a sudden, earlier this year, the definition of ´indirect bidders´ was changed, making it more complicated to follow this stuff. What is clear however, is that almost half of the incredible amount of $ 2 trillion, i.e. $ 1000 billion (!!), is being ´purchased´ by the printing presses of foreign central banks.

This could explain both the record amount of debt issued and the record low yields.

As the CBO has projected huge deficits PLUS huge debt roll-overs (average maturity down from 7 years to 4 years) up to at least 2019, do you think we could extend the ´printing´ by foreign central banks — CB´s ´buying´ each others debt — for at least 10 more years?
That would free us from saving, enabling us to ´consume´ our way to reflation of the economy (as is FEDs/Treasuries attempt imo).

I´d appreciate your, and other readers´, take on this.

I think that this is generally correct, but would add that Alan Greenspan, of all people, incurred the wrath of George H. W. Bush by tightening into an election. That was probably his last “independent” act.

This seems completely wrong to me. First, the Fed’s mandate is not to preserve the value of the dollar, but to “”to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” I don’t see that bailouts are antithetical to those goals. Second, I don’t see how the Fed’s actions in 2008-2009 have particularly hurt the value of the dollar, at least not in terms of purchasing power. Perhaps they will in the future, but it is a bit early to assert that, I think.