Independent estimates are considerably different than what the government puts up, just not the estimates Krugman wants to listen to. Additionally, inflation cannot take hold until deleveraging first is allowed to occur, as I have mentioned in numerous posts. Yes, because no one anticipated the Federal Reserve being insane enough to corner the Treasury Market with so much freshly printed dollars, keeping rates down. All of this is horn tooting and none of it has anything to do with the Federal Reserve buying debt. I don't know this guy Krugman is fighting with, so I can't argue his point. But if he's on the other side of Paul Krugman, most likely he is correct.
Operation Twist is balance neutral. On net, debt is being exchanged not added. You're right about speculation having some effect. Professional estimates put it, for oil, at 15% of the total price.
in September 2011, the Fed performed Operation Twist in an attempt to lower long-term interest rates. In this operation, the Fed sold short-term Treasury bonds and bought long-term Treasury bonds, which pressured the long-term bond yields downward. http://www.investopedia.com/terms/o/operation-twist.asp Right there, my friend. The objective of OT was to keep interest rates low for longer term issuance. As for the 15% of the total price being speculation, that's hogwash. It was much, much greater - otherwise we couldn't get swings of $147 to <$40 in a few month period.
If the Fed owned most treasuries I could see where you're going, but it doesn't. You are using small factors which are merely consistent with the libertarian "government is always bad the free market is always good" as the crux of your arguments.
You need to believe that because the anti-Keynesians have to be wrong, because the Austrians have to be right, because the free market has to be divine, because only Ayn Rand's vision can "save us". Do you really believe libertarian views get no traction because there is a vast conspiracy, secretly uniting left and right, to silence them?
It's not about who owns all the treasuries, but who is buying most of them that affects the price now. I'm not using any libertarian argument at all. I'm using what is going on right now. If you cannot refute my responses with anything factual, then just say so.
Not at all. I believe the debt experiment has to run it's course. Your Keynesian theory is really only successful because you define your terms of success so narrowly on the timeline of human modern history. For example, you can look at the last 30 years and go - see? It's worked! You'd be right, of course, if all you cared about was the last 30 years. In the next 30 years, it is my belief that you, and other Keynesians, will see what a failure it was (if you choose to admit it, of course). Federal Reserve insanity, which we've really only seen at these levels for the past 4 years or so, cannot be called a "success" after 4 years. Hell, it can't even be considered a success inside the 4 year period! The very idea that a group of people who are non-elected and academic can somehow determine what level of money printing the economy needs to continue along it's merry path, despite being spectacularly wrong about past crashes and recessions and forecasting, is pure lunacy.