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Foreigners Sell Second Largest Amount Of US Bonds Ever In Past Week, Record $93 Billion In US Paper Sold In Past 2 Months

Tyler Durden's picture





 

Two weeks ago when we reported that there had been a record consecutive week dump of US Treasury paper in the Fed's custodial account, as reported by the weekly H.4.1, we made the assumption that this was China preemptively selling US paper. Well, that may or may not have been the case, but it was only part of the full story. We have now learned that Europe, and especially Germany has been just an active seller of sovereign bonds, most certainly including US paper, in recent weeks. As FAZ reports, the head of Commerzbank Martin Blessing has been dumping all bonds in his possession, primarily PIIGS paper, but also US and German ones. He does add the clarification that this has been a complicated project as there has been a buyer's strike (and with the CDS extinction it will only get more difficult as there is no natural hedge remaining), and his dumping has certainly not made things easier. Now as we all know by now, when starting a panic exodus, one has to be first, be smarter, or cheat. Here we will add a fourth one: or sell US paper. After all the demand for this is nearly insatiable, or so the neo-Keynesians out there will have us believe. Well, in the last week, someone used our definition. According to today's update in the H.4.1, the total amount of securities held in the custodial account for foreign official and international accounts just plunged by $20 billion, of which $19 billion was attributable solely to Treasurys: the second largest weekly dumb ever. And since this total number includes both Treasurys, which are used for political purposes, as well as Agency securities, which don't really serve much in terms of a diplomatic statement but are great at shoring up liquidity, one can assume that the relentless selling in all types of US paper has had one purpose only: to generate capital. As the third chart shows, that amount is substantial: in the last 8 weeks foreigners have sold a unprecedented $93 billion across the custodial account bringing it to $3.392 trillion, the lowest since March 2011! So the next time someone asks where European banks are finding emergency liquidity now that commercial paper, money market and Libor Markets are all dead, you will have the answer.

Chart 1: Total Treasurys held in custody and weekly change: in the past week $19 billion worth of Treasury paper was sold, the second largest weekly amount ever.

Chart 2: Total securities held in custody and weekly change: in the past week, $20 billion worth of paper has been sold.

Chart 3: Rolling 8 week change in the Fed's custodial account

 


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Thu, 10/27/2011 - 21:00 | Link to Comment MFL8240
MFL8240's picture

Selling PIIGS bond or selling US Bonds, all the same crap.  Both insolvent and printing money.

Thu, 10/27/2011 - 21:35 | Link to Comment disabledvet
disabledvet's picture

"monetizing the debt." not insolvent. I'd say we've made it to about the year 1840--shall we call it a "cyclical recovery in government"?--granted things were much cheaper back then. And we had the Wagon Wheel (if you had a wagon wheel back in the day you could do anything!). Now we have "space shuttles." perhaps an upgrade then?

Fri, 10/28/2011 - 02:42 | Link to Comment acttang
acttang's picture

The PIIGS beg to differ: they WISH they could print money, but this darn EURO thing is such an inconvenience... 

Fri, 10/28/2011 - 05:41 | Link to Comment LuKOsro
LuKOsro's picture

The benefit of the latter is that people (and sovereigns) are still forced into purchasing dollars. How long will this still be happening no one knows. Even though  I would not hold my breath on it, the dollar's days as a reserve currency are numbered. 

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http://journey-to-alpha.blogspot.com/

Fri, 11/11/2011 - 00:18 | Link to Comment haibop
haibop's picture

It's like the market getting trapped..foam.

Thu, 10/27/2011 - 21:02 | Link to Comment FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Yep, looks like the first time in nearly 4 years that it has definitively turned downwards. The top is in!

Thu, 10/27/2011 - 23:24 | Link to Comment Gene8696
Gene8696's picture

+1. ...but I just finished watching a bootleg copy of "Margin Call"

Tue, 12/06/2011 - 23:05 | Link to Comment haibop
haibop's picture

Hmmmmm... range hoods

Thu, 10/27/2011 - 21:01 | Link to Comment broke433
broke433's picture

It's a good thing bill gross bought em all

Fri, 10/28/2011 - 02:45 | Link to Comment acttang
acttang's picture

What makes it better is that now we can have a selloff after we chased the big bond short into the cage. This mkt takes no prisoner...

Sat, 11/19/2011 - 14:36 | Link to Comment haibop
haibop's picture

we need buyers like that. walk in freezer

Sat, 11/26/2011 - 11:39 | Link to Comment haibop
haibop's picture

sure do...

Thu, 10/27/2011 - 21:04 | Link to Comment 101 years and c...
101 years and counting's picture

euro pd's selling their bonds to ben.  repatriot their usd into eur has created the ultimate short squeeze in all risk assets.  only 9 more months to go via op twist.

Thu, 10/27/2011 - 22:33 | Link to Comment scatterbrains
scatterbrains's picture

I agree, isn't this full speed ahead money printing ? Via twist,  fed is printing to buy bonds so that Europe can sell out and repatriate back home. The rising Euro is then pressure released via Swiss printing to maintain the peg... a  circle jerk of central bankers printing on the down low.

Thu, 10/27/2011 - 21:04 | Link to Comment Shizzmoney
Shizzmoney's picture

At least someone is still BUYING them.

I'd ask for a discount on that shit.

Mon, 11/14/2011 - 21:01 | Link to Comment haibop
haibop's picture

sure do... power4home pro

Thu, 10/27/2011 - 21:06 | Link to Comment Corn1945
Corn1945's picture

Low yield junk bonds guaranteed to lose you money.

Thu, 10/27/2011 - 21:07 | Link to Comment hotkarlandthecl...
hotkarlandtheclevelandsteamers's picture

So I would see this as highly deflationary...sell em rates rise, housing craters, adjustable debt becomes not sustainable.  But who the hell am I, I am not a black man posting with my shirt off who spends my time with big dinner parties and taking people out on my yacht.

Thu, 10/27/2011 - 22:19 | Link to Comment J 457
J 457's picture

Minus the shirt off comments, I think massive selling and no buying could lead to higher rates, which would not only cause another housing burden, but make debt servicing more of an immedite problem.  I see that as bearish for equities.  Why risk the volatility if I can make a decent return in T-Bills.   But then again, how will they fund the deficit if they don't print?  This could lead to a real interesting political battle.  

Sun, 03/18/2012 - 01:44 | Link to Comment haibop
haibop's picture

good idea forex automoney

Fri, 10/28/2011 - 08:30 | Link to Comment Carlyle Groupie
Carlyle Groupie's picture

"posting with my shirt off"

Poor Reggie. One day when he is older and has matured intellectually he will reflect upon his youth. He will realize that he could have become a great analyst, one with credibility widely respected for his knowledge and work.

If only he could have controlled his own vanity.

He could have become the black Meredith Whitney. But he blew it with the clown antics and is known far and wide for this rather than that. A suicidal ego knows no reason.

Thank you from China!

Fri, 10/28/2011 - 09:50 | Link to Comment oddjob
oddjob's picture

But who the hell am I, I am not a black man posting with my shirt off who spends my time with big dinner parties and taking people out on my yacht.

Its not about being black, more akin to a psychopath with violent peacock syndrome.

http://www.theburningplatform.com/?p=18895

Sat, 05/05/2012 - 12:49 | Link to Comment haibop
haibop's picture

pretty good info how to

Sat, 11/26/2011 - 11:44 | Link to Comment haibop
haibop's picture

that could happen... walk in cooler

Thu, 10/27/2011 - 21:07 | Link to Comment broke433
broke433's picture

They should call new Eurobonds eurobernenkes

Thu, 10/27/2011 - 23:18 | Link to Comment greensnacks
greensnacks's picture

Barber bonds.

Tue, 05/01/2012 - 20:58 | Link to Comment haibop
haibop's picture

agree... Inteligator

Thu, 10/27/2011 - 21:08 | Link to Comment lolmao500
lolmao500's picture

I would need a hell lot of money to buy those treasuries (like 20% interest)...

Fri, 10/28/2011 - 10:11 | Link to Comment TruthHunter
TruthHunter's picture

20% interest??

Of whose money?  If its your money, its a little low.

Sun, 12/11/2011 - 20:03 | Link to Comment haibop
haibop's picture

good luck! electric fireplace

Thu, 10/27/2011 - 21:16 | Link to Comment Comay Mierda
Comay Mierda's picture

Spx to 1360 at least in this epic short squeeze. welcome to the wolf market

Thu, 10/27/2011 - 22:07 | Link to Comment jcaz
jcaz's picture

Nice call, Octotrader....

Thu, 10/27/2011 - 23:07 | Link to Comment UP Forester
UP Forester's picture

It is.  Where do you think all the 401k money is now, pretty soon it'll be "all in" to pump it up.  Hell, mine was only down 10% last quarter, they wanna make that back for their X-Mess bonuses before the dice come up craps....

Fri, 10/28/2011 - 06:40 | Link to Comment Bobbyrib
Bobbyrib's picture

Seems about right. My co workers are telling me to take my money out of cash and put it into the market. I think I'll wait for the crash..

Thu, 10/27/2011 - 21:41 | Link to Comment DormRoom
DormRoom's picture

Triffin dilemma alert.  The USD as the reserve currency cannot solve it's domestic objective (QE-deleveraging), without creating international problems (hyperinflation for BRICS, and stagflation for developed countries).

BRICS already have high inflation.  The UK is likely in stagflation.

 

The more the Fed prints, the greater economic problems for other nations.  It's a structural problem embedded in the Bretton Woods System, when the USD left the gold peg.

 

If the exit in Treasuries accelerates, shits gonna get real. 

 

Robert Fisk, wrote an article in 2009, about oil countries exiting the USD payment regime.  That plan may be accelerating.

 

http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar...

Thu, 10/27/2011 - 22:05 | Link to Comment Seize Mars
Seize Mars's picture

Triffin dilemma alert.  The USD as the reserve currency cannot solve it's domestic objective (QE-deleveraging), without creating international problems (hyperinflation for BRICS, and stagflation for developed countries).

There is no dilemma. They do this on purpose. They want the power of reserve status specifically so that they can offload inflation into other economies. That's the only reason why the US hasn't collapsed already - because we have shoved so much inflation into China and elsewhere.

The more the Fed prints, the greater economic problems for other nations.  It's a structural problem embedded in the Bretton Woods System, when the USD left the gold peg.

Yes but it has nothing to do with Bretton Woods. It is a fully contemporary system of exploitation of the world's resources, in return for which they export little pieces of paper. Nice trick, eh?

If the exit in Treasuries accelerates, shits gonna get real. 

It will. Just watch.

Robert Fisk, wrote an article in 2009, about oil countries exiting the USD payment regime.  That plan may be accelerating.

Every oil producing country that has ever tried to exit the USD system has been bombed, invaded and occupied by the US. Do you know Ghadafi's sin? He tried to establish a gold-backed African currency. He had about 148 tons of gold. If you fuck with international paper bankers, you get killed by the USA. Go Team.

Thu, 10/27/2011 - 22:12 | Link to Comment DormRoom
DormRoom's picture

The union of petrol nations may introduce a petro currency, backed by China & Russia.  So no US bombing.. maybe some drone attacks against the plan architects.

 

Maybe that's why the US wants to invade Iran so much.  Iran has been transitioning away from the USD as the currency of oil payment for a while.

Thu, 10/27/2011 - 22:13 | Link to Comment trampstamp
trampstamp's picture

All in due time my friend. Even the big boys will get screwed. You can't screw the FED no matter what you think.

Thu, 10/27/2011 - 22:36 | Link to Comment gwar5
gwar5's picture

That'll be the day of the real reckoning, when oil is traded away from the USD.  Soon, very soon.  Putin is coming back and Russia is now the biggest oil exporter. He's made it clear what he will do. We're already road kill and the Karma truck is backing up to have another go. 

 

Thu, 12/29/2011 - 13:42 | Link to Comment haibop
haibop's picture

And don't forget the Iranian situation too. beacon payday loans

Fri, 10/28/2011 - 00:55 | Link to Comment Arkadaba
Arkadaba's picture

Yep!. Been reading Fisk for years. Who is next? I'm thinking Syria as a test run for Iran.

Fri, 10/28/2011 - 02:52 | Link to Comment acttang
acttang's picture

Totally agreed that the $ denomination was by design. Forgot which advisor to which president once said that "It's our $ all right, but it's your problem. Deal with it." We are at the dawn of these bozos not wanting to deal with it.

Fri, 10/28/2011 - 08:12 | Link to Comment QuietCorday
QuietCorday's picture

In my view, the only reason for the Libya campaign was Ghaddafi's moves towards establishing a new gold dinar. Someone is moving Mudgie catalysts, known as "rebels" in this case, round the region as though it was a game of Axis and Allies. 

The one to watch will be Turkey/Cyprus over drilling rights, with Greece, Lebanon and the wider EU pulled into the arena, with Russian and Gulfie pressure then into the mix, most likely. The potential for that to go nuclear doesn't bear thinking about, with the Greek state crippled, Europe a mess and Turkey finally realising the EU is a bum deal but having complications from turning their eyes instead to Syria (another current "rebel against the state" zone). Makes me wonder if this is why Hamas are trying to appear more reasonable recently ...   

Fri, 10/28/2011 - 10:15 | Link to Comment TruthHunter
TruthHunter's picture

"If you fuck with international paper bankers, you get killed by the USA."

 

OWS, take notice.

 

The rules didn't change because you are young, broke, and idealistic.

Sat, 03/10/2012 - 01:46 | Link to Comment haibop
haibop's picture

time to worry indeed... Rob Poulos

Thu, 10/27/2011 - 21:25 | Link to Comment 11.11
11.11's picture

Just in time for HARP 2.0.  Gotta let the people take advantage of these historically low rates.

Thu, 10/27/2011 - 21:34 | Link to Comment Yen Cross
Yen Cross's picture

 This is a GREAT thing! justWatch The Wave.....  Back in the old days a ghost told me that consolidation was taking place.

 

    Ok, payback is a bitch.  Just remember gravity, is the only straight line trade! I'm out

Thu, 10/27/2011 - 21:39 | Link to Comment msmith
msmith's picture

A look at the ES, DX, and GC shows that the "risk on" move is very near a key turning point as the wave counts are near completion.   The USD index may have already found some support from which to work higher from.  If so, it could encourage equities to return to the larger trend lower.  http://bit.ly/uZ0Uwd

Thu, 10/27/2011 - 22:09 | Link to Comment jcaz
jcaz's picture

...Or.... The 200 DMA might be resistance.....

Seriously, one hot month and the kids think stocks go straight up again.

Thu, 10/27/2011 - 21:54 | Link to Comment NOTW777
NOTW777's picture

look at a weekly of $tyx.

oct 2011 looks similar to dec 2008

Thu, 10/27/2011 - 21:54 | Link to Comment papaswamp
papaswamp's picture

Mr. Hanky gettin flushed in time for Christmas.

Thu, 10/27/2011 - 21:57 | Link to Comment Manthong
Manthong's picture

Latest buzz is China looking to go into the bailout bunco game for $100 billion or more...

Great.. This debt debacle is looking better for the market than the dot com boom.

Thu, 10/27/2011 - 22:01 | Link to Comment zorba THE GREEK
zorba THE GREEK's picture

Since world powers are not allowing CDSs to trigger, even on a 50% forced write-off of Greek debt, holders

of sovereign debt (bonds) have no way to hedge and interest rates will rise dramatically on all bonds.

Interest rates will replace CDS as a hedge which is going to make the servicing of government debt much

more expensive and greatly expedite the coming financial collapse. 

Fri, 10/28/2011 - 04:04 | Link to Comment cowdiddly
cowdiddly's picture

Ever wonder who invented the CDS? Don't tell me its that dang Blythe Masters AGAIN>

Thu, 10/27/2011 - 22:41 | Link to Comment Mark123
Mark123's picture

Interesting point....this could get interesting!

Fri, 10/28/2011 - 04:36 | Link to Comment css1971
css1971's picture

You take your money out of the "safety" of sovereign bonds. The world wide bond market is huge. 80 Trillion

The question is. Where do you put the money?

Stocks? 36 Trillion

Commodities? 400 billion

Property? (pass)

 

So money exiting the bond market, it's fungible, where will there be the largest effect?

Welcome to stagflation.

Sat, 12/24/2011 - 03:15 | Link to Comment haibop
Thu, 10/27/2011 - 23:10 | Link to Comment DTCC 1999
DTCC 1999's picture

Anyone know if/how/when a lack of CDS protection for EU countries could trigger US bonds being dumped?

Thu, 10/27/2011 - 22:04 | Link to Comment bernorange
bernorange's picture

Why are they selling all those Treasury bonds when they have so much useless tradition laying around?

www.pmbug.com

Thu, 10/27/2011 - 22:23 | Link to Comment cowdiddly
cowdiddly's picture

Never fear Indirects are here. We will buy our own bonds that we just issued last week if you dont mind ptting them under a fan for a few hours so the ink will be dry.( White cotton dress shirts are up 120% you know). This is getting uuuuugly. Think ill go finish my foxhole in the backyard and work on my tripwires. MY Voodoo doll of Berskanke with a silver nail in his  bald head ain't workin.

Thu, 10/27/2011 - 23:12 | Link to Comment UP Forester
UP Forester's picture

Tripwires are for kids.  Real men use tanglefoot.  Go long razorwire....

Thu, 10/27/2011 - 22:18 | Link to Comment batterycharged
batterycharged's picture

So, uh, gold?

Thu, 10/27/2011 - 22:22 | Link to Comment Schmuck Raker
Schmuck Raker's picture

I'd like to take this opportunity to open my mouth, prove my ignorance, and ask a dumb question.

If a European bank sells it's US bonds, then buys Euros, and subsequently repays a loan in Euros - isn't that deflationary for both the Dollar AND Euro?

Does this effect the Euro proportionately more than the Dollar(supply of Euros being smaller)?

Thus inflating the Dollar relative to the Euro?

Thu, 10/27/2011 - 23:06 | Link to Comment bobert
bobert's picture

I would think this would be deflationary for the US and inflationary for the EU.

The other side of supply is demand and there is then less supply and demand for Euro's.

Fri, 10/28/2011 - 08:25 | Link to Comment Eugend66
Eugend66's picture

If a European bank sells it`s US bonds to the ECB, then buys ...

Sat, 10/29/2011 - 21:26 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Thanks

Thu, 10/27/2011 - 22:24 | Link to Comment gwar5
gwar5's picture

Guaranteed Greek-like returns later. They know Bernank is going to commence with the much more dignified defacto default of printing away messy debts. Is 'skidaddle' spelled with one or two d's?

 

 

Thu, 10/27/2011 - 22:27 | Link to Comment papaswamp
papaswamp's picture

I'm sure someone knows...but why isn't that fact that CDS didn't trigger not having a larger impact? Just delayed realization? Basically CDS are now worthless....because if e 50% haircut doesn't trigger nothing will. How much $$$ is now in jeopardy since people cannot hedge against risk? has this just not dawned on the market yet?

Thu, 10/27/2011 - 22:37 | Link to Comment Hansel
Hansel's picture

The reason the CDS haven't triggered is because nothing has happened yet.  There has been no bond swap, so no one has petitioned the ISDA on a ruling for the CDS.  Nothing happened this morning other than another announcement of a plan with details yet to come.

Thu, 10/27/2011 - 23:14 | Link to Comment UP Forester
UP Forester's picture

It takes a long time for Banksters to climb down from their Ivory Towers to tell the ECB they ain't gonna "volunteer" for a new hair style....

Thu, 10/27/2011 - 23:43 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"Basically CDS are now worthless...."

'''''''''''''''''''''''''''''''''''''''''

Think of it like this... You went to the track and bet on a horse, but before the race the horse was scratched... So your bet is off the board; ie, you have no bet.

Question is: If you take your 'no bet' ticket back to the parimutual windows and present it for refund, will you get a refund?

Perhaps they will tell you it's an edible ticket, or it might make poor grade tp.

It's amazing to think of all the cds floating above the real assets of the world that might be totally worthless bets...and worthless hedges...and how many longs/shorts might be naked.

Fri, 10/28/2011 - 01:05 | Link to Comment Arkadaba
Arkadaba's picture

I think delayed. Insanity!

 

Thu, 10/27/2011 - 22:31 | Link to Comment Pure Evil
Pure Evil's picture

So which idiots, other than MillionDollarBonus, is buying all this toxic crap?

Don't tell me the FED is indirectly monetizing Euro banks while using the Chinese as a smoke screen.

Woo hoo, I owe another trillion to the Eccles cabal.

Fri, 10/28/2011 - 00:33 | Link to Comment Tsunami Wave
Tsunami Wave's picture

Yeah.. MillionDollarRetard says that the smart money runs to U.S. Treasuries and that he also proudly owns them (Along with stocks in American companies in which he also admittedly 'proudly' owns). I wanna hear is smart (sarcastic, really) explanation?

 

Where are you MillionDollarBonus?

Thu, 10/27/2011 - 22:39 | Link to Comment essence
essence's picture

No doubt we've all seen those Hitler uTubes covering a myriad of subjects.

There's this part early on, where the first bad news is presented. Heir Hitler doesn't even look up from his desktop and waves his hand in dismissal. Yet we know from previous viewings that shortly he'll be moaning & groaning about how F***ed he is.

Are we at that point with U.S. soverign bonds?

Everyone and their brother has been predicting their meltdown at some point.  Yet the feds (chiefly the private cabal Federal Reserve that pretends it isn't a foreign occupying force) has so far managed to contain any free market reaction. They along with the corporate interest running the Treasury, the Plunge Protection Team, the Exchange Stablization Fund, etc (does even Zero Hedge know how many ways markets are manipulated?) have managed SO FAR .. to keep a lid more or less on events. So far.

Is this the point where things get real?

On a personal note ... had some 401K funds in PIMPCOs TRF. Now until recently, Bill had been saying the right things and what-the-hell, TRF was the least worst of my choices.  Last week I "borrowed" heavily against that to vacate ... since Bill sold out (again) to his corporate masters.

I'm outta here, even  further into tangibles.

Deal with paper at your own risk because when it crashes it could very well be with lighting speed.
At that point there'll be no good exit for anyone still in.

 

 

 

Thu, 10/27/2011 - 23:51 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

If a stampede out of US Ts begins katy bar the door...

System Reset

The name Keynes will be included in passages of future history with John Law's... if there is anyone left to write or read it.

Thu, 10/27/2011 - 22:35 | Link to Comment ACP
ACP's picture

So the Fed, the Treasury and the US economy is going down the tubes. How is this not bullish?

Thu, 10/27/2011 - 23:09 | Link to Comment bobert
bobert's picture

Good thought!

Thu, 10/27/2011 - 22:37 | Link to Comment Lady Heather...UNCLE
Lady Heather...UNCLE's picture

...repatriation to EUR?...the bots will bid equities even higher.

Thu, 10/27/2011 - 22:38 | Link to Comment Mark123
Mark123's picture

Black Swan.

 

There is such a massive amount of intervention in the financial system, you just gotta know there is one of these birds coming soon....who knows how or where, but it will happen.

Thu, 10/27/2011 - 22:39 | Link to Comment Yen Cross
Yen Cross's picture

Tylers! This in need of classic overlay!  HUGE OVERLAY!

Thu, 10/27/2011 - 22:41 | Link to Comment Yen Cross
Yen Cross's picture

P.S. the markets are retracing. They will lunge up one more time. " Death Throws"...

Thu, 10/27/2011 - 22:41 | Link to Comment Buck Johnson
Buck Johnson's picture

So that is where they are getting the liquidity, I wonder if it will be the same place they get it to fund the EFSF 20%.  The world markets especially in the West are in panic mode for sure, CNBC didn't even report on this or alot of stuff.  It seems Zerohedge is doing a better job finding and reporting on information than the MSM.

Thu, 10/27/2011 - 22:46 | Link to Comment Yen Cross
Yen Cross's picture

 Tyler please tell me you are doing Amazon Proxies?

Thu, 10/27/2011 - 23:08 | Link to Comment steelrules
steelrules's picture

Is this China selling US to buy European?

If it is there is a hell of a lot more coming.

Thu, 10/27/2011 - 23:12 | Link to Comment midgetrannyporn
midgetrannyporn's picture

on the bright side trillions and trillions of us dollars was added to the us stock market in just three weeks. trillions, and trillions of extra money in less than a month. these are solid gains and not transitory at all.

Thu, 10/27/2011 - 23:57 | Link to Comment data_monkey
data_monkey's picture

Someone please tell me, if foreigners are unloading bonds, where's the cash going? Seems that if it were going everywhere, all assets (and some spending cash) then a few billion here, a few billion there, etc., would be inflationary, eventually uber inflationary. This can't all possibly find its way into banks that will never release it into the system, can it?

Fri, 10/28/2011 - 00:21 | Link to Comment whaletail
whaletail's picture

This can't all possibly find its way into banks that will never release it into the system, can it?

And this, D_M, IMO, is the poison pill that will keep Eric Holder and his successors from ever prosecuting any of the high level crooks at any financial institution. You can't assume that The Fed, the supposed failsafe, would rates "in 15 minutes" to stem the velocity because of the massive conflicts of interest linking The Fed with the financial institutions. Who watches the watchmen, indeed.

Fri, 10/28/2011 - 01:22 | Link to Comment UP Forester
UP Forester's picture

Notice the price of PMs lately?  They're still cheap....

Fri, 10/28/2011 - 02:41 | Link to Comment Big Slick
Big Slick's picture

"Someone please tell me, if foreigners are unloading bonds, where's the cash going?"

Really good question.

If rates are set to rise from massive bond selling by foreign holders, I'm not sure I agree w those who say equities are about to tank.  Take a look at a chart of Treasury prices overlayed with the S&P... almost directly inverted over last few years.

This is mkt agreement w the traditional view that money is either in bonds or stocks, and flows from one to the other.

Interesting that in the 90s this inverse coupling was decoupled and both prices moved closely WITH each other for quite a while.

I'm wondering when/if the current inverted trend will decouple and we go back to direct correlation.  Or do we stay a mirror image.

Either way, I'm thinking the more direct play is shorting TLT.

Serious opinions? (Becoming a stupid question on this site's boards)

Fri, 10/28/2011 - 07:52 | Link to Comment mailll
mailll's picture

From the Federal Reserve printing press (inflated balance sheet).  See my post below.

Fri, 10/28/2011 - 00:01 | Link to Comment Fips_OnTheSpot
Fips_OnTheSpot's picture

Oh wow.. I didnt expected it so harsh after submitting the FAZ article. Very nice, ZH.

I wonder if there's more behind Blessing's statement he is _against_ voluntary haircut..

Fri, 10/28/2011 - 00:02 | Link to Comment bill1102inf
bill1102inf's picture

Come on, they sell, buy US Stocks, dump us stocks, buy ust's, rinse, repeat, recycle. 

Fri, 10/28/2011 - 02:38 | Link to Comment data_monkey
data_monkey's picture

Come on, what, Bill?

I agree this has been and is the cycle, the USD's are contained and it seems like we're all good.

Everything's fine until those assets aren't the place to keep those $$'s. Then where does the cash go?

From what I can tell, that day is approaching fast. Bailing wire and duct tape, sir.

Fri, 10/28/2011 - 03:17 | Link to Comment data_monkey
data_monkey's picture

Thinking about this further, even some of those millions/billions should be seeping their way into the wild...like a damn starting to crack.

I'll take the high ground. You can have the low ground.

Fri, 10/28/2011 - 00:06 | Link to Comment ultimate warrior
ultimate warrior's picture

Would one want to get into TBT?  Or just stick to accumulating PM's.

Fri, 10/28/2011 - 00:23 | Link to Comment whaletail
whaletail's picture

This thread needs a "Gold Bitchez" post.

Fri, 10/28/2011 - 00:42 | Link to Comment Hephasteus
Hephasteus's picture

I think it needs.

Damn fed!!!!! You scary!!!

more.

Fri, 10/28/2011 - 00:41 | Link to Comment Hephasteus
Hephasteus's picture

I love how all the fed stuff has 2 y-axis. An extra one for the fraud and counterfeiting and unicorns.

Fri, 10/28/2011 - 04:06 | Link to Comment Non-Zero
Non-Zero's picture

I believe this is the beginning of Martin Armstrong's "private wave":

http://armstrongeconomics.files.wordpress.com/2009/04/martin-armstrong-i...

e.g. Investors lose confidence in governments to repay their debts, so they move out of the public sector (bonds) and into the private (stock market and gold).

Even though it makes no sense that the stock market should go up, it will because the bond money has to go somewhere. Granted, they will also head into gold too, sending that to $x an ounce (insert your favourite large number for x).

/waits for the bond bubble to pop and the gold rush to really get going...

Fri, 10/28/2011 - 04:47 | Link to Comment Grand Supercycle
Grand Supercycle's picture

DAX monthly chart at blog shows recent bullish candle revealing aggressive short covering rally enclosed within big picture bearish pattern.

Bullish USD weekly/monthly and bearish SP500/DOW monthly
charts will eventually ensure a violent reversal of equity uptrend.

http://stockmarket618.wordpress.com

Fri, 10/28/2011 - 07:19 | Link to Comment abugarance
abugarance's picture

why of cource that is so obvious and explains a lot of the EUEUSD move

run for safety bitchez

very key for risk assets going forward, as when this trend eases, the shorts will get the Zeuro smoked and the melt-up will melt down

Fri, 10/28/2011 - 07:48 | Link to Comment mailll
mailll's picture

I've been saying it all along that foreigners haven't been buying our debt for quite some time now.  But the interest rates on treasuries are still near record lows.  This doesn't add up.  The only thing I can conclude is that the Federal Reserve is buying our debt with printed money until the opportune moment presents itself, and that is to crash our us Government and our US economy along with it.  In 1929 the elite crashed the world economies by giving easy credit to all, then pulling the plug on it which led to the great depression.  In 2008 the same thing happened.  They gave easy credit to all, then pulled the plug on it and everything crashed.  But taking down economies is child play to them.  Now they have their sites on taking down the US Government.  The Fed is printing all this money to buy up our treasuries, in complete secrecy of course, and when the time comes, they will stop buying them.  What happens? Total devastation in the United States. Our Government crashes as well as our economy.  I think this is the plan.  If you think about it, then you may realize that it is entirely possible.  The US government borrows about 40 cents out of every dollar it spends to run our government. When the Fed decides to stop purchasing treasuries, the government loses 40% of its revenue right off the bat. Then the chain reaction to total economic devestation begins.  After all, the elite are pushing for a one world currency and a one world government.  What a plan.  I hope they fail completely if this is what their plan is.

Fri, 10/28/2011 - 08:14 | Link to Comment Trad3er_1337
Trad3er_1337's picture

can somone please post the link to this fed data?? thanks

 

Fri, 10/28/2011 - 09:11 | Link to Comment tedstr
tedstr's picture

Burning the furniture to heat the home.  2 days only !  everything must go folks!  Cash sales only.  No deals will be turned away!

Fri, 10/28/2011 - 09:17 | Link to Comment Snakeeyes
Snakeeyes's picture

http://confoundedinterest.wordpress.com/

 

Don't worry, they will be buying again once they realize that the Euro bailout plan is pure BS.

 

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