Biggest loser of the year, so far- YOU!

It was okay for US government to lend support to the economy by buying bonds in 2008-2009 but their ongoing buying is creating even bigger risk for the government IMO. The biggest bond portfolio in the world is held by the Fed now! When interest rates go up, bond prices go down. So far, this year, Fed seems to have lost $200b in value making Fed (and you and I) the biggest losers for the 2013 so far!!!

At the end of July, the Federal Reserve held $1.98 trillion in U.S. Treasuries. That figure represents just over half of the Fed's $3.6 trillion balance sheet.
"Our estimate shows that the spike in bond yields since the first quarter of this year has caused a mark-to-market loss of $192 billion on the Fed's holding assets, equivalent to approximately all of the unrealized gains that the Fed had accumulated since it began to implement quantitative easing in late 2008," according to Scott Minerd, global chief investment officer at Guggenheim Partners.
"Although in keeping with their own accounting principles the Fed does not record mark-to-market losses, a continued increase in bond yields would incur actual losses should the central bank decide to sell assets," Minerd explained.
Read full article at:

http://www.thinkadvisor.com/2013/08/29/the-200-billion-hit-to-the-feds-bond-portfolio-and