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$102 Billion In 2,5 And 7 Year Treasuries On Deck For Next Week As Fed Prepares To Become Top Holder Of U.S. Debt
Even as the public debates aggressively on the nature of bond bubbles and whether they have a footing in the US economy, Tim Geithner's office has no intention to discover the denouement of this particular polemic, and instead is preparing to belch the lastest batch of US-backed paper. In the upcoming week the US Treasury will issue a total of $102 billion in 2, 5 and "curve sweetspot" 7 year notes, with nominal amount all in line with expectations.
- August 24 $37 billion in 2 Year Bonds
- August 25 $36 billion in 5 Year Bonds
- August 26 $29 billion in 7 Year Bonds
And in the unlikely event that China decides to reorient its purchases to even more non-US debt and sell existing holdings as it did in June (previously discussed on Zero Hedge), there is always that UK-based nest of direct bidders who just can't get enough of their own, pardon, American issuance. With holdings of over $360 billion and rising, the otherwise insolvent UK needs just $440 billion to become the second largest holder. And since it has purchased $280 billion in the last year alone, the probability that the Fed, pardon, the UK will soon be the second, and possibly biggest holder of US debt is distinctly possible.
And incidentally speaking of the real, not shadow, Fed, its holdings of $777 billion in US Treasurys, and growing once again at a rate of $30 billion per month, will surpass Japan as the second largest holder of USTs by the end of September, and China, which holds just $40 billion more, by the mid-term elections. In other words, we should not worry that China will soon forsake us - after all the Fed is gladly once again monetizing the Chinese stake.
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The sooner the Chinese dump their USTs the faster they can aid in the speed of the demise of FRNs.
The Chinese selling treasuries is bullish. That means their treasury purchasing capacity increases.
I've been noticing ZHrs using more and more TPTB logic in their comments (jokes), a sort of perverted humor. Capacity bitchez!
A soon-to-be dead man's resigned humor, that which is often displayed by those who have been living on death row for decades and just wish to be done with it all.
+1
That's also what made the M*A*S*H series so successful -- it's a documentary of what actually happened. After enough blood-and-gore, the only thing left is desensitized humour.
The FRN is being led out of his cell in chains down the corridor with the warden yelling "dead man walking!"
I believe it is called "gallows humor."
Except that they're buying gold, oil and lots of other things.
Political promises, not so much.
I was born many (many) moons ago, back when America was a bit more puritanical. One day when puberty was budding, my father took me aside and warned me of the dangers of masturbation, saying "Once you start, you can never stop". Seeing as how I had already tried masturbation, I didn't see the threatened inability to stop as a problem.
But that sage fatherly advice does seem to apply to the Fed these days. Maybe I should send them a note or something. With pictures.
As long as the pictures are of Racquel Welch-- and not a pimply-faced "you"-- I think we're all good with that.
Deal!
Wanna shake on that? :>)
Best laugh I've had all day - Thanks CD
Best analogy of the day. hahahahah
Thanx dude
I was always able to stop in time for school.
Seriously, do you work for the SEC's enforecement division? I think they have a special division for people like you.
Do we pay ourselves some interest that we can invest in a second house?
OT: The sump pump seems to kick in when the SPX breaks 1072.
Yes! Absolutely! As long as the Fed has this sign hanging in its front window!
"Credit? You Said It!"
"No Phone, No Loan."
Other gems from the finance company days.
What happens when the Fed owns twice as much as anyone else. Won't that look just a little bit out of whack? Can someone do the same analysis with other Central Banks?
And we all thought it couldn't be done. So how long can they keep this up?
I added the bars, and it only comes out to $3.1e12 in total debt. Given that the size of the US economy is $14e12, that appears quite manageable.
The graph was "Top Holders of Debt", no implication that it included 100% of all holders. I think you may want to re-calculate, based on getting the total somewhere else.
Or else you forgot the /jesting++/ flag.
You're right, the US probably owes money to everyone. That's why the down-and-out Uncle Sam on the advertisement has $13 trillion written on his "Please help" sign.
So when this 1 GDP-worth of freshly printed dollars hits the streets, where will it go?
Some of us think it may go to zero.
Or, if you prefer, 0.0e-37
In a few more years. Anyone paying taxes that's not a corporation will get their face and name printed on a bill. Till they finally figure out that it's being used by debt collection agents to get money out of him for some senators hooker bill.
Indeed. There are statistics and damn lies. The chart above shows Treasuries - which are long-dated. Huge amount of T-bills also kicking around. Average matuity of debt is just 4 years (compare UK 14 years). Debt load heads north while non-debt financed GDP heads south. The 100% debt-to-real-gdp ratio is in the rearview mirror.
Does that sound "quite manageable?"
Imho, the longer the U.S navy stays moored , the
more selling from China, absence of 'guanxi',
a fatal psychology mistake
I don't know what you are talking about here. Everything is good in Tim's World. In fact, he and Ben are taking shits together.
You hear that Mr. FRN?... That is the sound of inevitability... It is the sound of your death... Goodbye, Mr. FRN...
Just stumbled on this:
http://www.roadtoroota.com/public/261.cfm
I find it interesting.. About the coming gold standard.. ??.. hmmmm
When they print one that says, "GOLD CERTIFICATE" I will be impressed.
Having "Gold" come out of an inkwell is what got us in this mess in the first place.
Personally I'm waiting for the holy grail of signs that Armageddon is around the corner, that being when they redesign the bills and start using Gold colored ink in Federal Reserve Notes.
Wait, aren't they.......................shit.
When the word "Liberty" is removed from the coinage it's probably already too late.
By the way, I really appreciate your series "Welcome to the Insane Asylum." Good job.
I thought the holy grail of "run for the hills" tipping of the hand was when they begin to put still-living presidents on the bills?
I suspect that as we get closer, all "signs" will lead to Armageddon. :>)
Yes, in fact Armageddon tired of Wadin fer it.
Oh.... well we all knew this one was coming. A frakkin shame. :(
circle-jerk, FED style.
Wait, wait for me.......................
Damn, you guys never wait for me.
Not that I know from personal experience, but I'm told that continually drinking one's own piss and eating one's own poop is found to be fatal damn-near 100% of the time.
Any reason to believe Da Fed consuming a steady diet of Timmy Bills is any different?
Some African apes do eat/recycle their own feces and live so I guess in certain species it works.
But really, we (Fed) will become the largest holders of our own (Treasury) debt?? What kind of Madoff/Ponzi scheme are we running and do the village elders really believe this will work?
Yields on the Treasury have hit 2.58%.
New record I reckin.......
Does this mean the PPT will allow equities to gradually fall in order to create demand for bonds and then will try to spike the market?
Or do they boost equities Fri-Mon, then abruptly drop them Tues-Thurs?
Also, how does the (27.08.10) Q2 GDP, rev. 1, fit into this schedule?
I guess the "invisible hand" of the "free market" has decided...launch began at 15:08-15:13...now we'll see how big the spooge is...or is it just a "head" fake.
"Monetizing the Chinese stake," bitchez.
There have been constant whispers that the mysterious UK bidders are actually working for the Chinese. Does anyone have any insight into this claim either way?
I suspect this is not true. Planet Earth needs *at least* $5Tn new debt (new bonds) to be issued by sovereigns this year, *plus* additional bonds to roll existing debt (some 40% of the US bonds roll each year). There simply isn't enough capital in existence, especially since the Chinese are not having the banner export year that we all had hoped.
No, I suspect the UK is buying US bonds because of a direct currency swap with the Fed, or as a front for the IMF (where the IMF may have set aside SDRs specifically to buy US Treasury bonds, backed by the Fed subsidizing those purchases). This works for the UK also, because their central bank is ready to go "super-nova", and they really would like to have as many dollars as they can get (each central bank thinks it is screwing the other).
If US Treasury bond purchases are backed by IMF SDRs, then this has the added effect of making a simple cut-over to a new world reserve currency. Remember when everyone talked about leverage the Chinese has, because of all the US bonds they own? Well, just wait until somebody lets slip that the IMF owns a few $T of US bonds ... far more than the Chinese ... who do you think could call the shots then? (Especially since the IMF can print too, unlike the ECB.)
This article would be consistent with that: There is a reason the Fed will soon be the Number One largest (visible) holder of US debt. I suspect that should we have an accounting of what is *actually* on the Fed's books, we'd find out that this particular milestone is probably long past (but obscured through international swap agreements).
Summary: China is smarter than that, and doesn't have the money, and if they did, they wouldn't lever up into a system they know which is collapsing (we are watching the collapse before our very eyes, whether or not some people want to pretend otherwise).
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets not
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets not forget
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets not forget about
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets not forget about much o
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets not forget about much of
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets not forget about much of the
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets not forget about much of the Saudi
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets not forget about much of the Saudi and
You are correct, the chinese and others do know that the system is collapsing. What they are doing is using their money to buy resources and tangible things in order to have something for nothing (US treasuries will become defunct and so will dollars). When the time happens, it will be a mad rush out the door. People are slowly positioning themselves to be the first out. And lets not forget about much of the Saudi and other oil rich arab money that is in western banks via treasuries and such, many countries are going to get screwed if they don't look after their best interest.
Also sorry about the many posts, for some reason my system went blah.
Where does the US public fit in, not on the chart?
It's not whispers of UK bidders working for the Chinese, it's fact, them and Caribbean. Last year's annual revision found another $140 billion of Chinese Treasuries purchases between June 2008 and June 2009, most of which came out of UK and Caribbean.
The Govt buys its own debt......FISCAL INSANITY
It buys it's own shit. It's own lies and it's own belief in it's ability to do a job. This is just natural progression.
http://www.youtube.com/watch?v=FHT8v9bw4Nk
species 8472 asked Where does the U.S. public fit in?
Well, part of our total debt is debt the government owes itself.
This is about $4 trillion, about half of which was borrowed from Social Security and Medicare to pay for current expenses.
You may wonder how does this work, when you owe money to yourself?
Well, for the left hand, it's 4 Trillion of assets; for the right hand, it's $4 trillion of liabilities.
In reconciliation, it's a wash!
Don Levit
There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
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