Their observation is:
My theory is that the money has floated into the Treasury market. A lot of people have wondered how the Treasury would be able to continue running record deficits without the Fed buying. Well, we now know that the banks are picking up a lot of slack in the lending markets, and they are doing so in the midst of very dicey market conditions. Is it that much of a stretch to posit that the Fed reached an agreement with them whereby the banks would take over where the Fed left off?
But last month we wrote in detail about this and showed specifically what the FED is doing.
This is what we showed:
And this is how we are getting there:
The boys are now printing money, buying the bonds back from the banks, they buy new one and the cycle goes on. The economy is being propped up by printing money. It does not go into M2 growth, but it keeping the swimmer just ahead of the bow wave, but the swimmer will tire soon! Then watch out! Where is Keynes now, as Zero Hedge note, looking at the data does count! Good job!
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