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Presenting The Plunge In Foreign Interest For US Treasurys

Tyler Durden's picture


There has been much speculation recently about whether or not China is or isn't dumping its holdings of US Treasurys. Spoiler alert: it isn't. At least not outright. After all, it still is not a self-sustaining economy and as such relies on what's left of the US middle class to purchase its production. In fact, according to the latest TIC data, after 5 months of declines, Chinese UST holdings increased in April 2011. The problem with TIC is that it is woefully late. It is also terribly unpredictable and subject to annual adjustments which see hundreds of billions adds or subtracted from estimated holdings. Furthermore much has happened in the period between April and the first week of July. Namely the end of QE2. Furthermore many will note that there has been little if any change in market sentiment to Treasury paper now that QE2 is over (which is actually very much untrue after last week we saw the biggest percentage blow out in the 5 Year in history). But for the best indication of what non-US based buyers of Uncle Sam's paper think about the desirability of said paper, we went to the source, and compiled all Auction issuance data since the June 2009 bidder reclassification rules. The result is quite striking. Over the past 2 years, foreign demand, expressed by the final take down as a percentage of total auction size across the entire curve (2,3,5,7,10, and 30 Year) has plummeted from 55% to just below 35% as of the last auction.

Stated otherwise, and as seen on Chart 2 below, Primary Dealers (mostly) and Direct Bidders (to a very minor degree) now account for roughly two thirds of all Treasury placement. The problem is that Dealers no longer can flip their holdings to the Fed as Zero Hedge had been demonstrating POMO after POMO. And since the debt ceiling will be raised, and since nothing in Washington will change vis-a-vis deficit spending when all the posturing smoke and mirrors clear, the Treasury will have no choice but to issue another $2 trillion in debt over the next year. 

The only question is who will it sell it to?

And yes, there will be demand, even foreign demand, for Uncle Sam's paper. But at what price. Certainly not at prevailing rates.

We may have our answer as soon as next week's issuance of $66 billion in 3, 10 and 30 year paper. Because if the recent issuance of 2, 5, and 7 Years was any indication about foreign interest, watch out below.


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Sat, 07/09/2011 - 18:55 | 1440345 HungrySeagull
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Hate to say it, but they will raise the Debt Limit, the People will rejoice and we will revisit the issue after Elections are over and done with.

Sat, 07/09/2011 - 19:14 | 1440371 SOLnow
SOLnow's picture

Raising the debt ceiling solves nothing.  Political drama for the masses.  No QE = no funding at current rates.

Sun, 07/10/2011 - 01:56 | 1441014 TruthInSunshine
TruthInSunshine's picture

Shorting U.S. Treasuries is going to be the best play on tnotes since going long U.S. Treasuries circa 1981 when it was yielding nearly 16% (had one bought a 30 year tnote in 1981 they'd had been able to sell it for a MASSIVE gain by 1985 when new issuances yield 7.5% -

I'll leave it for everyone to do the math on the spread in yields over the remaining 26 years to maturity.

Sun, 07/10/2011 - 02:37 | 1441037 Popo
Popo's picture

Easy solution to all this -- just start paying people's SS payments in Treasuries.   "Here's your cash granny,  you just can't spend it for 30 years."



Sun, 07/10/2011 - 05:27 | 1441079 Oh regional Indian
Oh regional Indian's picture

Popo, actualy the elephaunt in the rom with regards to this issue is the fact that the UK is not buying anymore. And how could it. Unless there was some backdoor FED pump.

I remember 3-4 months ago, being shocked by the size and % of UK's purchase.

Tylesr? Isn't that the missing piece here?

Imagine, with all the bad news currently in the UK if the news on the street was that the GBP is backstopping the USD via junk paper purchases. 



Sun, 07/10/2011 - 06:53 | 1441098 richard in norway
richard in norway's picture

i think the brits have decided to tie the pound to the dollar and will continue to buy T bills. i'm not sure what the payoff is but it must have something to do with the discount window and brit banks

Sun, 07/10/2011 - 10:37 | 1441226 unununium
unununium's picture

You diplay a remarkable belief in the illusions presented.

The GBP and USD are, if not the same currency, two windows into the same corrupt manipulative good-cop bad-cop, teeter-totter system.

Who's to say the Fed and BOE have not issued offsetting 50-year swaps and that each is free to buy as much of the other's sovereign offerings as their ponzi counterfeit oligopolistic selves see fit?

These central banks' credibility is completely shot at this point.


Sun, 07/10/2011 - 14:51 | 1441579 TruthInSunshine
TruthInSunshine's picture

Given that our Dearly Beloved and Benevolent Federal Reserve Non-Bank is a literal offshoot of the Bank of England, no one studying history should find this surprising.

Fractional Reserve Banking that intentionally booms and busts economies for harvest time for the true owners, FTL!

(For the Loss)

Sat, 08/13/2011 - 16:22 | 1557463 slewie the pi-rat
slewie the pi-rat's picture


Sun, 07/10/2011 - 15:58 | 1441773 Oh regional Indian
Oh regional Indian's picture

Plausible theory unun. And plausibly deniable too.


Sun, 07/10/2011 - 07:13 | 1441108 Ghordius
Ghordius's picture

I was also shocked by the UK's size of it.

It must have some relevance.

Sun, 07/10/2011 - 09:20 | 1441167 ViewfromUnderth...
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Middle East and some Chinese buying come through London

Sun, 07/10/2011 - 14:03 | 1441557 TruthInSunshine
TruthInSunshine's picture

Popo, actualy the elephaunt in the rom with regards to this issue is the fact that the UK is not buying anymore. And how could it. Unless there was some backdoor FED pump.

I remember 3-4 months ago, being shocked by the size and % of UK's purchase.

Tylesr? Isn't that the missing piece here?

Imagine, with all the bad news currently in the UK if the news on the street was that the GBP is backstopping the USD via junk paper purchases. 



Fantastic point, ORI.


Few people either realize or focus on the fact that the British and Dutch (and the Dutch especially on a proportionate scale - as in amount of total inflows into treasuries as a % of total expenditures) have been two massive buyers of U.S. Treasuries for some time.

Sun, 07/10/2011 - 15:55 | 1441770 Oh regional Indian
Oh regional Indian's picture

Interesting TIS. The Dutch too. 

The Dutch East India Company. The British East India Company.


Looks like an old game of pass the parcel crossed with musical chairs and snakes and ladders.



Sat, 07/09/2011 - 23:41 | 1440829 jeff montanye
jeff montanye's picture

i'm going with revisit it sooner.

Sun, 07/10/2011 - 00:36 | 1440920 thunderchief
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They have already raided government pensions.  I say IRA's and 401K's will be next if the  bond market tanks.  They will need a buyer of last resort and those funds are just sitting there with a government fence around them.  They will grab it and put obscene penalties on anyone trying to cash out of them.

Sun, 07/10/2011 - 00:48 | 1440941 No Bid
No Bid's picture

Before they did that they would reconsider the federal tax exemption of municipals, something that's already been whispered about, and definitely something to keep an eye on going forward.


Sun, 07/10/2011 - 07:25 | 1441118 Tom_333
Tom_333's picture

It may not be the British buying.I could be purchase through the City.The Brits are broke.Who may then be the endbuyer....the Fed?

Sat, 07/09/2011 - 19:01 | 1440352 max2205
max2205's picture

Kick, can

Sat, 07/09/2011 - 19:43 | 1440395 LetThemEatRand
LetThemEatRand's picture

Anyone else see that cliff up ahead where the road ends?

Sat, 07/09/2011 - 21:55 | 1440666 papaswamp
papaswamp's picture

Silliness I say silliness...road is fine...."Jeebs drive faster!"

Sun, 07/10/2011 - 09:37 | 1441182 FEDbuster
FEDbuster's picture

The road is as long as the FED's balance sheet is high.  QE to infinity and beyond!!

Ben Bernanke is "Mr. Creosote"

Sun, 07/10/2011 - 01:05 | 1440960 Remo Williams
Remo Williams's picture

Yes we can! (kick the can down the road)

Sat, 07/09/2011 - 19:08 | 1440360 James T. Kirk
James T. Kirk's picture

maybe  we can find some strange new world where no man has gone before, and get some outworld suckers to buy this crap 

Sat, 07/09/2011 - 20:29 | 1440466 Fazzie
Fazzie's picture

  If they did, they would set up an intergalatic monetary fund and the USA middle clas taxpayer would be funding bailouts of alien planets.

Sun, 07/10/2011 - 06:34 | 1441095 Oh regional Indian
Oh regional Indian's picture

Hah! It probably exists, we just don't know it yet!


Sat, 07/09/2011 - 20:33 | 1440470 Raymond Reason
Raymond Reason's picture

Aye Cap'n.  Live long and prosper. 

Sun, 07/10/2011 - 10:18 | 1441147 Incubus
Incubus's picture

Any reasonably intelligent species would wipe us out before we ever got the chance to mess up their civilizations. 


Ignorance does not imply innocence.


edited for less vulgarity, as I'm feeling pretty upbeat and sociable on this day.

Sun, 07/10/2011 - 08:58 | 1441149 DaveyJones
DaveyJones's picture

"The only question is who will it sell it to?"

small school children. Just stay 1000 ft away from the school. Those sentence enhancements are a bitch

Sun, 07/10/2011 - 14:07 | 1441563 TruthInSunshine
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by James T. Kirk
on Sat, 07/09/2011 - 19:08

maybe  we can find some strange new world where no man has gone before, and get some outworld suckers to buy this crap


This is the reason for what we have been told is the final shuttle mission. They have packed the shuttle with a quadtrillion in treasury notes and they are being delivered to planet Keynes, which has an extraterrestial population of organic beings known as Krugmanites.


Sat, 07/09/2011 - 19:11 | 1440365 zorba THE GREEK
zorba THE GREEK's picture

 I would buy some if the rate were high enough.

Sat, 07/09/2011 - 19:26 | 1440379 malikai
malikai's picture

I think 25% would attract me as a buyer.

Sat, 07/09/2011 - 20:33 | 1440475 FeralSerf
FeralSerf's picture

If they were 25%, gold would be a much better investment.

There would be a reason for the 25%.

Sun, 07/10/2011 - 07:00 | 1441103 malikai
malikai's picture

I just went back to the period 1975 - 1982 with a gold and T-bill rate chart.

Wow, you're right. Stunningly so.

Sun, 07/10/2011 - 10:42 | 1441231 unununium
unununium's picture

High rates did not kill the ramp in gold for a while, but they did kill it eventually.

Folks when gold starts its moon ride, you must sell some on the way up.  Let's not be a bunch of oinkers now.

Sun, 07/10/2011 - 14:08 | 1441564 FeralSerf
FeralSerf's picture

It's different this time.  Haven't you noticed?

Sun, 07/10/2011 - 14:35 | 1441611 malikai
malikai's picture

It is different this time. Money supply is up much higher, gold is up much less, and interest rates are just silly. So how much longer will it go on?

Sun, 07/10/2011 - 09:41 | 1441188 FEDbuster
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Zimbabwe had many 200%+ up days in it's stock market, we will have our day in the sun, too.  Get your DJA100K hats printed now.

Sun, 07/10/2011 - 10:44 | 1441235 unununium
unununium's picture

If I were an uberclass shot-caller, I would do a controlled experiment before pulling the trigger on the BIG swindle.

Maybe Zimbabwe was a petri dish.

Sat, 07/09/2011 - 19:13 | 1440367 Ham Wallet
Ham Wallet's picture

Some shithead from MSNBC was on Real Time w/ Bill Maher last night and said investors are piling through the windows of the White House to try and get their hands on US Treasurys.  lol. 

Sat, 07/09/2011 - 19:30 | 1440384 cartonero
cartonero's picture

They're looking for the silverware

Sat, 07/09/2011 - 20:34 | 1440476 FeralSerf
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They need to check with the Clintons.

Sun, 07/10/2011 - 00:02 | 1440862 I Got Worms
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These two responses are why I read ZH.

Sun, 07/10/2011 - 00:44 | 1440934 thunderchief
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The best thing to do with US debt is make it only redeemable in the USA and to be used on infastructure projects like high speed rail, subways etc. Let the Chinese come in and build them with their dollars and then give them half ownership in these projects. If they say no then don't pay them shit.

Sun, 07/10/2011 - 00:52 | 1440946 No Bid
No Bid's picture

I wish there was some reciprocal to "flag as junk" so that I didn't have to comment to tell you that I 100% agree with your post.

Sun, 07/10/2011 - 01:18 | 1440975 ba dum tiss
ba dum tiss's picture

flag as crunk?

Sun, 07/10/2011 - 01:29 | 1440990 logically possible
logically possible's picture

I 100% agree. Thumbs up.

Sat, 07/09/2011 - 19:33 | 1440388 lizzy36
lizzy36's picture

Just an FYI, that shithead doesn't work for MSNBC, he works for US Treasury. And his name is Geithner. ;)

Sat, 07/09/2011 - 20:33 | 1440474 Fazzie
Fazzie's picture

 Technical distinction only.

Sun, 07/10/2011 - 00:11 | 1440879 Problem Is
Problem Is's picture

That's Jeethner... As in Wanker Timmay...

Sat, 07/09/2011 - 20:46 | 1440500 gwar5
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Those Primary Dealers must be fighting with num chuks in D.C. to get their hands on more of those "no risk" UST bonds to flip back to the FED. 

The PD's "investors" remind me of the joke about the guy who developed a huge tapeworm from giving it a steady diet of lemon cookies. The PDs, of course, are the tapeworm.

Sun, 07/10/2011 - 10:46 | 1441240 unununium
unununium's picture

Fresh USD = lemon cookies

Sat, 07/09/2011 - 21:38 | 1440614 Iam_Silverman
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"to try and get their hands on US Treasurys."

Oh, I thought he said they were trying to get their hands on the US Treasurer.  That made more sense to me.  So they were really looking to buy some Treasuries, huh?  Time for new hearing aids.

Sat, 07/09/2011 - 22:57 | 1440768 zeusman
zeusman's picture

I think the point is one way or another people/Fed continue to buy.. If they hadnt rates would be skyrocketing

Sun, 07/10/2011 - 01:58 | 1441017 TruthInSunshine
TruthInSunshine's picture
by Ham Wallet
on Sat, 07/09/2011 - 19:13


Some shithead from MSNBC was on Real Time w/ Bill Maher last night and said investors are piling through the windows of the White House to try and get their hands on US Treasurys.  lol.


That shithead was a dolt from MSNBC who is too idiotic to realize that the Fed's been the buyer of last resort.

Sun, 07/10/2011 - 09:49 | 1441196 FEDbuster
FEDbuster's picture

Most talking heads on TV and radio still think China is the number one debt holder of Treasuries.  Most don't even know the FED owns treasuries, or that they are the number one bag holder.  Hell, they think the FED is part of the Treasury Department.

Sat, 07/09/2011 - 19:20 | 1440375 Sudden Debt
Sudden Debt's picture

When they raise the debt limit, it will need to be high enough to buy all bonds for the next 24 months because nobody will want them anymore.


Sat, 07/09/2011 - 19:29 | 1440382 Lionhead
Lionhead's picture

"The only question is who will it sell it to?"  Elementary my dear Watson, the Mexican & Mid East drug cartels. They have the same problem as China. Lotsa USD's.  By doing so, they finance the US Gov't which entitles them to special protection under the laws of our fair land.

Sat, 07/09/2011 - 19:45 | 1440402 trampstamp
trampstamp's picture

Now that's a thought right there. I can see this being a solution. Keep it in the family.

Sat, 07/09/2011 - 20:00 | 1440421 HungrySeagull
HungrySeagull's picture


I'll be damned. That would be outstanding!

They can wrap the drugs in the paper and make it easier for Customs to catch em by the sinking characteristics.

Sun, 07/10/2011 - 03:55 | 1441057 New World Chaos
New World Chaos's picture

The cartels might do this as leverage to keep the U.S. government supplying them with assault weapons via Operation Fast and Furious.  Obama did this as a false flag against gun rights back home.  He knows what the endgame is.  Besides, the CIA and the Zetas are buddies back from the good ol' days at School of the Americas.

Sun, 07/10/2011 - 10:00 | 1441205 FEDbuster
FEDbuster's picture

If Republicans would pursue this story, I think they could put an end to Barry Soetoro.  Of course MSM will not back them up or dive into the who, what and why this "Gungate" operation was started.  This was all about getting a new "Weapons Ban" in the United States due to violence in Mexico by US imported guns.  Hillary was the "point man" on this operation, talking it up every chance she could.  This operation was a top down directive, not a handful of rouge agents.  One guy from the ATF blew the whistle on it, and they fired him (I am surprised he is still alive).  This should have been a BIG story, but Casey "fucking" Anthony and the Debt Ceiling have over shadowed it.

Sun, 07/10/2011 - 13:04 | 1441478 WaterWings
WaterWings's picture

US Constitution Article 3, Section 3:

Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No Person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court.

Sun, 07/10/2011 - 02:23 | 1441030 doesmybuttlookf...
doesmybuttlookfatinthis's picture

Now that's thinking outside the box.  Hey how about if our government starts selling those drug cartels automatic weapons, where they will use them on other drug cartels, thus reducing the surplus population of payroll requirements. Oh wait its already been done.

Sun, 07/10/2011 - 09:56 | 1441203 UgglyBetty
UgglyBetty's picture

Hmm you think so? I would say illegal money does not go to "legal" assets, legal meaning shown, registered. It's a good thought but not practicable in my view, too risky. More likely trade drug money for other illegal assets such as illegal guns.

Sun, 07/10/2011 - 12:14 | 1441393 Lionhead
Lionhead's picture

The drug cartels have been laundering money since the 1980's as Max Keiser has pointed out with Citibank receiving money via limousines arriving every Friday late afternoon for the drop off. So, if this has been going on for 30+ years, the "registering" of said monies has no doubt been perfected to avoid any unpleasantness in the transactions.

As we know via ZH, the US Treasury reports on UST buying are put into basic "buckets" to avoid being to specific where & who the buyers are. Add to that the lag time in reporting, the annual revisions of the buckets & the fact there are numerous off line buyers in the Caribbean that are surrogates for anyone that wants to own the bonds. Oh, did I mention the fact you get a UST "put" if you buy them?

I would agree with you on the bartering of guns for drugs, but obviously, the profits from drugs far exceed the purchases of the weapons. When one understands the role of the Exchange Stabilization Fund (ESF), you can see how such an idea is entirely plausible. No one will be able to prove it unless a complete audit is done of the NY Fed bank & the movement of currency & gold swaps under the direction of the ESF principles, Obama & Geithner.

Google the ESF, do your homework & research. I believe you might change your viewpoint. The documentation & press coverage from earlier times is still available to see. When the situation becomes desperate in the US, TPTB will turn to any means necessary to maintain their powers & control. Pushing their corruption a little farther is of no consequence to them. In for a penny, in for a pound.

Sun, 07/10/2011 - 17:56 | 1441999 UgglyBetty
UgglyBetty's picture

Thanks for your reply. I'm accustomed to corruption in my country (latin america) but what you mention is enlightening and also shocking, not the system itself but the fact that it could be sustained for so long in the country that we, as banana republic, thought was something better than ours... You can imagine, people here still buy dollars as a safety heaven... every single day...

Sat, 07/09/2011 - 19:29 | 1440383 css1971
css1971's picture

The question is where will the money previously going to treasuries go instead?

Sat, 07/09/2011 - 19:57 | 1440399 sasebo
sasebo's picture

The stock market. Where else? Right where the QE2 money went. The Fed has most of those Treasuries.

Sat, 07/09/2011 - 20:36 | 1440477 Raymond Reason
Raymond Reason's picture

Not only the stock market.  There will be more dollars chasing fewer goods everywhere. 

Sat, 07/09/2011 - 20:38 | 1440480 Fazzie
Fazzie's picture

 It never went to treasuries anyway, they were flipped back to the Fed.

Sun, 07/10/2011 - 05:34 | 1441082 Bob Paulson
Bob Paulson's picture

Say what?

Sat, 07/09/2011 - 20:46 | 1440505 Fazzie
Fazzie's picture

 Thats a moot question anyway. Without the Fed supressing bond yeilds, bonds will attract capital looking for a safe haven.

Sat, 07/09/2011 - 19:30 | 1440385 AssFire
AssFire's picture

Everyone knows  the US household sector is gobbling up these bonds with their unemployment checks.

Sat, 07/09/2011 - 19:32 | 1440386 Goldtoothchimp09
Goldtoothchimp09's picture

since the FED and the primary dealers (banks) are essentially one and the same -- don't you think there is some quid pro quo arrangement -- in exchange for the riskless profits flipping treasuries -- the banks have agreed to continue buying treasuries post QE2 in some amount and duration?!

This is a centrally planned financial system afterall.

Sat, 07/09/2011 - 19:49 | 1440408 cartonero
cartonero's picture

I believe the PDs are REQUIRED to bid so that an auction can never fail.  The Fed will find some backdoor way, I don't doubt, of taking the treasuries off the PD's hands before they start to choke on them, while denying the existence of another QE.

Sat, 07/09/2011 - 20:44 | 1440496 Raymond Reason
Raymond Reason's picture

If the govt has "off budget" expenses, i'm sure the Fed has "off balance sheet" loans, at a fraction of a percent. 

Sat, 07/09/2011 - 20:57 | 1440529 JohnG
JohnG's picture

It's named "Other Assets" on the Fed balance sheet, and it's growing.

Sat, 07/09/2011 - 21:41 | 1440623 Iam_Silverman
Iam_Silverman's picture

"The Fed will find some backdoor way, I don't doubt, of taking the treasuries off the PD's hands before they start to choke on them"

Wasn't this how TALF was supposed to work?  But instead they (PD's) shoveled all of their MBS/CRE CDO's into the window.

Sun, 07/10/2011 - 01:41 | 1441005 Goldtoothchimp09
Goldtoothchimp09's picture

for sure - It will come with an acronym of course.  The FED's specialty...

WFIWDDT - we're fucked if we don't do this -- the FED WFIWDDT term open market operations program

Sat, 07/09/2011 - 23:13 | 1440793 Eternal Student
Eternal Student's picture

You wonder if it's rigged? You might find this interesting:

"What I have been afraid to blog about: The ESF and Its History_Part 1"

Couple that with this:

Go down to the title of the article below, and it seems that the ESF is backstopping the $300 Trillion in derivatives by the big banks:


Derivatives: A Capital Markets Gong Show For Whom The Bell Tolls

The game isn't just rigged. It's rigged using one great big nuclear bomb, on top of which we're all sitting.

Sun, 07/10/2011 - 15:10 | 1441676 Raymond Reason
Raymond Reason's picture

Eternal Student, that is an amazing series of videos about the ESF (which i'd never heard of).  Thanks for the link.  Mindboggling.   

Sat, 07/09/2011 - 19:56 | 1440393 sasebo
sasebo's picture

The stock market. Where else? Right where the QE2 money went. The Fed has most of those Treasuries.

Sat, 07/09/2011 - 19:41 | 1440394 SwingForce
SwingForce's picture

Put your money where your mouth is, hey?

Fuck you POMO HOMO's!

Sat, 07/09/2011 - 19:44 | 1440396 trampstamp
trampstamp's picture

I guess the only reason we will have buyers is because we are one of a few countries with AAA credit. Shit, you have countries buying bonds from other countries close to insolvency.

Sat, 07/09/2011 - 19:45 | 1440401 tjfxh
tjfxh's picture


if China stops buying US tsys or unloads them, who is going to finance the KAS? If the KAS drops, then so does the CAD necessarily. Who is China going to sell its exports to if not the US? As long as China is a net exporter and the US is its major market, China will support the US KAS as necessary. Anyway the real terms of trade favor the US. Much ado about nothing.

Sat, 07/09/2011 - 20:17 | 1440441 Tejano
Tejano's picture

As long as...

Sun, 07/10/2011 - 08:52 | 1441146 Urban Redneck
Urban Redneck's picture

"As long as China is a net exporter and the US is its major market"

Might want to check that reality... at least in relation to Europe...

Sat, 07/09/2011 - 20:12 | 1440416 Use of Weapons
Use of Weapons's picture

Ok, sigh. For the "mouth breathers" (as "JM" likes to call you all)

Budget - $685 billion just got ratified for the military spend. Hedge fund top class are running at $100 mil pay checks [find it for yourself already; bankers are on the low ball game @ 20, under entertainment and so on] and you're still not getting this. If you're reading this, you're either not of that class, or laughing like buggery 'cause you are - and that's ZH's real readership. (LuLWuT?! -- LOL!!)

The 'rest of the world' is being held ransom; it works until your boys/gals come home and see that the Republicans have screwed over their dad/mom/sister/brother on social needs. Because, the US model is "we were too pussey to do draft, so we got the lower classes to sign up for education spend on our cards".  Any educated person would look up "grain" and "land ownership" for ex-military in the Roman Republic, and draw some conclusions.



The Republicans are actually shitting the country down the pan, because they don't understand that 'infinite growth' is based on 'full spectrum domination of global power', and not "God". And that includes, we have to add - a social net. If you need a lesson on what happens when you add ex military + no safety net + opportunistic bankers... well. His name was Adolf Hitler.


But yes. We do laugh at your country. We really do. And then we cry. And push the buttons for it to end.




40% obesity now.  In the first three weeks, that's 170 million people who are instant kills. The multitude is dripping in saliva right now. On the good side, it means we won't be hungry until three months later, for all those who kept fit. Then again, if you've ever eat decent meat, fatty fast food is the domain of the peasant class, and we like ours to be fit, muscled and healthy. I suspect this will act out like the buffalo - keep the skins, and leave the rest to rot.

Sat, 07/09/2011 - 20:13 | 1440438 Tyler Durden
Tyler Durden's picture

You bring up an interesting point. Zero Hedge's readers are the wealthiest and best-educated of any financial-focused website with more than 1 million unique monthly readers.



Sat, 07/09/2011 - 21:34 | 1440608 FederalReserveB...
FederalReserveBankofTerror's picture

Tyler please connect the dots between


Above you are saying the Treasury needs to issue $2 Trillion in Treasuries over the next year. Am I connecting the dots correctly in that 25% of the $2 Trillion in Treasuries will be auctioned off in August 2011? Please clarify if I am reading this incorrectly. 

Sat, 07/09/2011 - 23:50 | 1440846 snowball777
snowball777's picture

More like 680B needs to be issued over that timeframe...has anyone seen the Bernank? He wasn't by the printers when last I checked.

Sat, 07/09/2011 - 21:41 | 1440620 Troublehoff
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I hit ZH at work, at home on my laptop, my desktop and mobile.. so i might be counting as 4 unique readers.

dont know how your stats work - if I'm logged in maybe you only count me as one anyway



Sun, 07/10/2011 - 00:21 | 1440890 HungrySeagull
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And some of the Poorest who are of stout heart and sometimes enjoy a site like ZH.

Sun, 07/10/2011 - 00:33 | 1440907 edotabin
edotabin's picture

"AND watches CNBC". Maybe "and USED to watch CNBC"

Either way, congratulations for this fine distinction!

Sun, 07/10/2011 - 00:34 | 1440914 edotabin
edotabin's picture


Sun, 07/10/2011 - 00:37 | 1440921 Prometheus418
Prometheus418's picture

15% under the age of 34, and 87% without children?

No wonder there are so many who are lusting after the apocalypse.  I guess if I was over 50, and had no kids to worry about, I might be ready to laugh as the world burns as well.

As it stands, I've got three under 10 years old, and another 30+ years of work ahead.  But, I'm hoping that the early bird still gets the worm, and getting this education now keeps us safe, fed and sane.


Sun, 07/10/2011 - 03:36 | 1441056 Rynak
Rynak's picture

99% certain that the stats don't actually check properties of visitors, but instead just location... then looking at the demographics of that location, and assuming that they match the visitors.

So, say your ISP gateway is located in an area with a high percentage of asians - then you'd be counted as asian.

Sun, 07/10/2011 - 09:13 | 1441154 DaveyJones
DaveyJones's picture


Sun, 07/10/2011 - 04:06 | 1441055 slewie the pi-rat
slewie the pi-rat's picture

@ prometheus:   55% is over 50 and

87% No Kids 0-17

so, kids are older, over 17, out of home.  it's not too shabby, really.  we're not too entertained by all this, either, especially if we have grandchildren.  or really young girlfriends or boyfriends...

still, ya gotta just laugh, sometimes, maybe 1/2 doz times a day, here @ zH.  i fit the profile pretty well, except somehow these other assholes ended up with most all of my money!

the demographics don't seem too bad.  tyler shouldn't be overly apologetic.  we can make allowances.

Sun, 07/10/2011 - 09:12 | 1441157 DaveyJones
DaveyJones's picture

so the Chinese are taking over

Sun, 07/10/2011 - 10:21 | 1441218 Atomizer
Atomizer's picture

You bring up an interesting point. Zero Hedge's readers are the wealthiest and best-educated of any financial-focused website with more than 1 million unique monthly readers

Bravo Tyler!

Sat, 07/09/2011 - 20:20 | 1440450 gwar5
gwar5's picture

Your post sounds like mouth-breathing.

Sat, 07/09/2011 - 21:44 | 1440638 Iam_Silverman
Iam_Silverman's picture

"But yes. We do laugh at your country. We really do. And then we cry."

Because you realize that your country is heading down the same path, but with fewer natural resources and a much smaller defense force?

Sun, 07/10/2011 - 01:53 | 1441012 InvalidID
InvalidID's picture

 +1 for the lulz


 Sadly (for them) they are leading the way down the path.

Sun, 07/10/2011 - 22:43 | 1442489 Use of Weapons
Use of Weapons's picture



A race to the bottom, it is, the winner being the last man standing.

Sat, 07/09/2011 - 22:12 | 1440710 Missiondweller
Missiondweller's picture

Drinking and posting???

Sun, 07/10/2011 - 02:46 | 1441042 madbomber
madbomber's picture

The dogs are more then able to become just shadows and are said to follow anyone that might have strange or covert intentions. Many locals will tell you they will closely follow any stranger on the Island until they leave. low growls are often heard when one is near and the smell of wet dog is experienced.

The black dogs are known to breath heavily on the necks of those that have no good on their minds.

Sun, 07/10/2011 - 04:35 | 1441071 GlenD
GlenD's picture

The time has come, the Walrus said. Perhaps things will become worse and then better. Perhaps there’s a small god up in heaven readying herself for us. Another world is not only possible, she’s on her way. Maybe many of us won’t be here to greet her, but on a quiet day, if I listen very carefully, I can hear her breathing. ~ Arundhati Roy

Sat, 07/09/2011 - 19:59 | 1440420 zorba THE GREEK
zorba THE GREEK's picture

   Fear drives people to treasuries. Create enough fear.

   Treasuries sold. End of problem.

Sat, 07/09/2011 - 20:02 | 1440423 HungrySeagull
HungrySeagull's picture

When a herd of sheep stampede away from the Alpha wolf, the rest of the pack eats em all alive over the next hill.

One sheepdog screaming "STOP!" is lost in the thunder of wool.


The carnage and butchery is kept a sufficient distance away from the next farm over so that those sheep don't know what the future holds for them.

Sat, 07/09/2011 - 20:30 | 1440445 Use of Weapons
Use of Weapons's picture


You know nothing about the 4D hunting practices of canines. Spatial recognition, time, topography, individual health of animal and so on are all factored in. A wolf pack can mark an ailing moose (through scent / speed etc) and leave it for 3 weeks and then congregate on its projected location and take a kill. That means a future based hunting pattern - and if you want the papers on it, more than happy to provide them.



You're not a predator, so fuck off. Sharp. Pointy. Teeth.


As your nick announces, you're just a scavenger who survives off the byproduct of real predators. This is a challenge to step up, or never post again - I detest poseurs. I'm guessing you're like Zuckenfucker who states "only eat what you kill" and gets his team to present him with an animal. Try hunting in the wild, or taking a real kill.


Oh, and I suspect you eat your steak "medium/well done", fucking poseur.



Sat, 07/09/2011 - 21:07 | 1440545 kridkrid
kridkrid's picture

Fascinating. Other than zerohedge, what are websites that you frequent?

Sat, 07/09/2011 - 23:55 | 1440853 snowball777
snowball777's picture

That sounds extremely inefficient...why wait 3 weeks to "take a kill"?

Links, man!

Sun, 07/10/2011 - 22:47 | 1442475 Use of Weapons
Use of Weapons's picture

Here's a related paper (more of a short field note along the lines of "did I really just see that?!"), as the one I was referring to is behind a paywall -

A longer article, showing hunting patterns:

Wolf-killed bulls were in worse physical condition than wolf-killed cows throughout the winter. Bulls were significantly less vigilant than cows, they did not respond to wolf presence with increased vigilance and they formed groups less than half the overall mean herd size. Our previous work has shown that individual bulls are roughly six times more likely than cows to be killed by wolves (Creel& Winnie 2005), yet despite this relatively high level of personal risk, bulls do not increase vigilance in response to wolf presence


The simple answer is: large territories, moose / elk are much larger & when in peak condition cannot be safely hunted. The second paper focuses on how elk group / mitigate predation. Noting a prey animal as possibly sick / injured, and intercepting its projected course time/speed (these are rough estimates, wolves can't use the GPS on them - but as numerous studies show, animals / insects can navigate extremely efficiently using the sun / magnetic lines etc) provides the pack a risk averse hunting option, and has been proven - if the prey animal has worsened in condition, then easy kill; if not, it can be revisited later. (There are, of course, many more variables, e.g. Forest cover provides an advantage to the prey species, in breeding times cows will become more solitary & attempt to hide in timber areas; young / calves are preferred prey; relative abundancy of prey/predators - which modifies temporal behaviour of hunts by packs; less abundant prey = wolves will modifier their temporal patterns to match prey, otherwise they won't, barring cubbing times (spring/summer)).

Scent markers give a 4-dimensional topography to wolf territories (e.g. territory of packs are keenly maintained, and relative freshness of markers determine willingness of outside packs to enter territory to forage); packs show demonstrable ability to plan interception of potential food sources in medium term and short term hunting strategies. In effect, in addition to the geographical three dimensions of their territory, wolves overlay a 'time map' of markers that indicate boundaries, kill sites, dens and so on.

Some fun snippets of reference for my wolf fetish rant, which may or may not have influenced the style, and references to buffalo:

Adolph Hitler (whose first name means “lead wolf”) was fascinated by wolves and sometimes used “Herr Wolf” or “Conductor Wolf” as an alias. “Wolf’s Gulch” (Wolfsschlucht), “Wolf’s Lair” (Wolfschanze), and “Werewolf” (Wehrwolf) were Hitler’s code names for various military headquarters.


The Greek god Apollo is sometimes called Apollo Lykios, the wolf-Apollo, and was associated with the wind and sun. In Athens, the land surrounding the temple of Apollo became known as the Lyceum, or the “wolf skin.”




Bull males are tough to hunt when fit - when caught post-battle, after fighting for mating rights, they become easier kills. Wolves plan for this, and adapt accordingly.


Use of this metaphor to equate to Nation states is probable, and please remember we're salting the fries of metaphor munching gov. resources as we speak. If wolf = right wing threat, canis lupis lupis becomes a dangerous search term.




Oh, and I got 14 junks - at least someone noticed the hidden compliment though. But ye, don't troll when drunk, the effects are more clown than Cthulhu. (

Mon, 07/11/2011 - 00:06 | 1442634 snowball777
snowball777's picture

No junks from me...I find this fascinating. The brilliant adaptations of the animal kingdom never cease to amaze me.

This Tool song, Vicarious, always reminds me of predator / prey dynamics...the safety of the herd being guaranteed by the sacrifice of the slow and our in-built need for schadenfreude as a survival mechanism.

Thanks for the links!

Sun, 07/10/2011 - 00:36 | 1440900 HungrySeagull
HungrySeagull's picture

Hell, I would enjoy picking your bones.

A Posuer I am not. I am not speaking in animal terms literally. I use the Sheep/sheepdog/wolf imagery often because People in real life are one of the three. I was a sheep long ago. Baaaa... Then I woke up and learned that our way of life, the very freedoms I enjoy; bought and paid for by many over the last hundreds of years since Magna Carta was enacted.

With that in mind, I refuse to go quietly.

Zero Hedge is on the very edge of everything in this world. Nothing moves somewhere without someone making a sentance about it. I learned over my time here to respect those who take the time to write facts, correct or otherwise state a very strong position.

I don't suffer fools who mix anger, hate and name calling. Occasionally I will respond in kind because it is expected in ZH. But never personally because with the laws being created left and right, somewhere a problem is created.

We don't have the luxury of time anymore. Not now, not ever.

Especially not three weeks as you state.

Finally the Nick "Hungry Seagull" means nothing to me. Except a experience I had as a child faced with a bunch of gulls eyeing the fries. If it was not for the very heavy verbal abuse I recieved from my far left parents who live in thier own world disconnected from the pain of the real world I would not have recalled anything different.

They made a big deal over 45 cents worth of fucking french fries on a road trip. Boo hoo.

But a child learns. Especially from parents and sometimes decides to go it alone, my own way. If I must scavange or otherwise make do with what I "Discover" along the way, so be it.

One gull shows up... more come. Soon you are faced with a cloud of gulls. All intent on just one thing.

Maybe I am that first gull. Maybe not. I don't care what you or anyone thinks outside of my response here.

Sun, 07/10/2011 - 09:08 | 1441153 epwpixieq-1
epwpixieq-1's picture

"Zero Hedge is on the very edge of everything in this world." - I would tent to agree if the world were to include finance and partially political events - well come to the Matrix. Lucky for us the world is not so limited.  There are googolplex things and relations that we even can not count, not to say comprehend, that represent the real world. One can start with the Mendeley's table, for example, and yes it is not only Au and Ag that matters :)

Good luck to everyone tunned to the resonant frequency.

Sun, 07/10/2011 - 02:22 | 1441029 madbomber
madbomber's picture

Traditionally, an agent provocateur (plural: agents provocateurs, French for "inciting agent(s)") is a person employed by the police or other entity to act undercover to entice or provoke another person to commit an illegal act. More generally, the term may refer to a person or group that seeks to discredit or harm another by provoking them to commit a wrong or rash action.

cover yourself in my own blood  Drink my own blood

Hunt thyself.


to fall in the baseball park

believe in the baseball park.








Sun, 07/10/2011 - 11:16 | 1441286 unununium
unununium's picture

If this guy and DavidPierre are trying to get the USA to wake up and turn on itself then "sorry, fuckers."

When America wakes up, it will fly high again.  It will surprise many of you.  What we believe in, and our soldiers swear allegiance to, is real.

Maybe, in 40 years or so, we will even compensate some of the victims caught in the crossfire.


Sat, 07/09/2011 - 20:01 | 1440424 Zaphod B.
Zaphod B.'s picture

Dont panic.

Cover can with towel.

Hope is not an effective risk management technique.

Popcorn for nxt weeks auctions...Jiffy Pop still around?

Sat, 07/09/2011 - 20:01 | 1440425 buzzsaw99
buzzsaw99's picture

The only question is who will it sell it to?

Two words: stealth monetization. they did it through reagan, bush1, bush2, and they will do it during owebama. the only difference between business as usual and qe is how blatant they are about it. the uk, the caymans, wherever, will step up every time there is any doubt. watch and learn.

Sat, 07/09/2011 - 20:42 | 1440490 Troublehoff
Troublehoff's picture

agree with you buzzsaw...

there will be no failed auctions, interest rates will only be allowed to rise as high as they want and no higher.

it's a balancing act between 'growth' (i.e. fending off deflation and unemployment) on one hand, and inflation on the other hand..

i'm betting on inflation and no failed auctions until boom, weimarsville!


Sat, 07/09/2011 - 22:56 | 1440766 Caviar Emptor
Caviar Emptor's picture

No note left behind

Sat, 07/09/2011 - 20:27 | 1440458 mynhair
mynhair's picture

I'm not sure the debt limit will be raised.  There are enough serious new members out there.

Sat, 07/09/2011 - 23:56 | 1440858 snowball777
snowball777's picture

Yeah, like the 12 Pug noobs who sponsored HR 2411?

Obtain clue.

Sat, 07/09/2011 - 20:27 | 1440459 gwar5
gwar5's picture

I wouldn't buy our bonds either. Between the current rates and the dollar risk, what's the point. 

Sun, 07/10/2011 - 01:18 | 1440978 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Is this, like, a rhetorical question?

Sun, 07/10/2011 - 07:14 | 1441110 mick_richfield
mick_richfield's picture

But are rhetorical questions so bad?

Sat, 07/09/2011 - 20:28 | 1440462 CrashisOptimistic
CrashisOptimistic's picture

Might as well just be overt about it and trade treasuries for Brent.

Sat, 07/09/2011 - 20:29 | 1440468 MicksBus
MicksBus's picture

The end game is coming boys!

It was good while it lasted

Sun, 07/10/2011 - 01:23 | 1440985 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

What was good?  The abuse from the Fascist Dictators?  Or the Coca-Cola and french fries?

Sun, 07/10/2011 - 01:57 | 1441016 Vic Vinegar
Vic Vinegar's picture

You can still find Coca-Cola made with real sugar here in the States if you look.  See - the Mexican influence on us isn't all that bad.


Sat, 07/09/2011 - 20:59 | 1440531 Corn1945
Corn1945's picture

Bernanke is basically saying: "Go ahead.  Buy US Treasury Bonds. The very next day they will be worth less because I am devaluing the currency."

I'm sure people are going to line up and buy them after hearing that!

Sat, 07/09/2011 - 21:12 | 1440556 Stuck on Zero
Stuck on Zero's picture

No problem selling the bonds.  London and Caribbean Banking Centers will buy all the bonds.  I will too when they become cheap enough to wallpaper the bathroom with.

Sat, 07/09/2011 - 21:19 | 1440574 mynhair
mynhair's picture

When DC housing prices crater, we can talk tax increases.

When Pelousy flies coach on her own dime, we need tax increases.

When Algore downsizes his McMansions, the end is here.

Sat, 07/09/2011 - 21:26 | 1440585 RobotTrader
RobotTrader's picture

The 5-yr. yield can rise another 100bp and it will still be near 40-year lows.

But I doubt that will happen.

Seems like every month there is a new crisis, convulsion, emergency, or something that spooks investors back into Treasuries in a white knuckle panic.

If necessary, the Fed can engineer a mini-crash in stocks.  I mean, what's a quick 18% correction on top of a 100% gain?

Sat, 07/09/2011 - 21:45 | 1440640 Troublehoff
Troublehoff's picture

more significant than it sounds when you consider a 50% correction would wipe out the previous 100% gain

Sat, 07/09/2011 - 21:51 | 1440656 RobotTrader
RobotTrader's picture

What I'm saying is if you bought CMG at $30 2 years ago and now its at $325 and it crashes down to $250 you still killed it.

If CMG crashes by more than $50, I guarantee you that the 5-year will plunge from 1.6% to 1.3% in a heartbeat.

Sat, 07/09/2011 - 22:27 | 1440728 Corn1945
Corn1945's picture

Have you actually looked at a chart of CMG? How do these charts usually end? I'll give you a hint, pull up a chart of CROX.

We just went through this with the dotcom wreck!


Sun, 07/10/2011 - 02:48 | 1441043 ebworthen
ebworthen's picture

Just don't forget to take your profits because it's all paper until you have title or PM's.

Sat, 07/09/2011 - 23:14 | 1440792 zeusman
zeusman's picture

"more significant than it sounds when you consider a 50% correction would wipe out the previous 100% gain"

After painstaking analysis I find your math to be truly elegant

Sat, 07/09/2011 - 21:33 | 1440599 bakken
bakken's picture

The paper will move, it simply has to find a REAL price on the world market.  4.5%, 5.5%...  who knows?  LIBOR?


Sat, 07/09/2011 - 21:41 | 1440627 bakken
bakken's picture

It will be no surprise if rates climb next week.  It is one thing to be an asshole, and quite another to be an incompetent asshole.

Woa, what will that do to the CPI?

Sat, 07/09/2011 - 21:50 | 1440653 bakken
bakken's picture

Off Topic, but what happens to TIPS if the Government reworks the CPI calculations?

Sat, 07/09/2011 - 22:04 | 1440691 Kiwi Pete
Kiwi Pete's picture

1) Nationalize the Fed

2) Instruct the Fed to Forgive the debt they own

3) Print up some more money and give it to the Fed

4) Sell new debt to the Fed

5) Wait a couple of years until you reach the debt ceiling again

6) Repeat from step 2

7) Problemo Solvedo!

Man I wish we could solve our budget problems as easy as that! But our Fed (Reserve Bank) is already owned by the Government. Hey...

Sun, 07/10/2011 - 00:52 | 1440945 dalkrin
dalkrin's picture

"But our Government is already owned by the Fed (Reserve Bank)."

Seriously though, your idea has merit!  By that route, we could all be living large, with fat wallets!  Millionaires, the American dream for all!  No citizen left behind!

Long:  Wheelbarrows


Sun, 07/10/2011 - 02:51 | 1441047 ebworthen
ebworthen's picture

Probably why foreign purchases are down.

Long run it's a no win for them; we either debauch the currency, default, have a war and default on enemy combatant obligations, make our exports cheaper and their imports more expensive, or all of the above.

Sat, 07/09/2011 - 22:20 | 1440718 mt paul
mt paul's picture

will trade 

10 yr treasuries 

for smoked fish...

Sat, 07/09/2011 - 22:33 | 1440738 Chingalay
Chingalay's picture

The comments from Cheeky Bastard in this 2010 article might clear up some of the fog.

Do NOT follow this link or you will be banned from the site!