So if I created the cure for HIV but instead of selling it gave it away, it isn't worth anything according to you?
Here is a post from a guy on another board that I go to from time to time. Also link has detail of lastest 30 year auction. Interesting read: We are in a period where the Fed indirectly bought much of the Treasury new issuance. Buying MBS from the banks, which then spent an indentical sum of money to buy Treasuries sure looks like conspiracy, use of straw bidders and money laundering to me. It was ILLEGAL for the Fed to buy the MBS since they do not carry the full faith and credit of the US government. Indirectly, the Fed bought the majority of Treasury debt issued in the last 12 months so yes, the chart indicates there are buyers - or more correctly one large buyer. Yet they are nearly out of fig leaves to hide their conduct. They are starting to come back into the market directly. If you look at the Treasury auctions, you'll see a line called SOMA - system open market account, as in Fed open market operations. This is the Fed buying for its own account. In the latest 30-year auction SOMA accounted for 11% of the purchases, as the OP pointed out. We have no idea how much was bought with Fed money by other parties (banks) but even with such straw buyers, the bid to cover was a pathetic 2.36 - this is weak demand any way you slice it. Rising yield simply confirms the obvious. http://www.savingsbonds.gov/instit/annceresult/press/preanre/2010/R_20100211_1.pdf
And the electricity lighting his lights wasn't provided using borrowed money. And the water pouring out his shower every morning wasn't provided using borrowed money. And the gas powering the UPS truck delivering supplies was sourced without any debt. And of course the person providing the borrowed $30,000 is likewise living a debt-free existence. And on and on and on... This "example" falls apart on so many levels I find it hard to believe it was offered seriously.
Oh, this really really hurts!!! You got me!!! Yes, I am the Secretary of Education, here to make sure that you learn your basics, before you brave the scary world out there . Seriously, though, I completely agree. I should not be wasting my time posting here, but, I confess, this is a small addiction of mine. I'll beat the habit and soon the time will come when we won't be having our most pleasurable discussions. Will you miss me? Now, as to your actual question about monetary policy, do you really want me to respond?