U.S. Treasuries, Surprinsigly, Attract Many Buyers

salon.com:

Last week, in three separate auctions, the U.S. Treasury offered up more government debt for sale than ever before -- $104 billion dollars worth of notes and bonds. Given all the anxiety expressed in recent months about how the bond market was trembling in fear at President Obama's big budget deficits and the prospects of high inflation down the road, you would be excused for thinking that such a massive offering would cause even more dismay.

Read the whole story: salon.com

Comments

[Rule Of Law]

Gosh, Goldman has a boat load of our money--wanna bet they bought some of those treasuries with it?

[nomorefed]

People now are getting paid the SAME WAGES as they did in 2000. But are prices at 2000
levels? H3LL NO. So they go into debt, adding more layers tothe USA debt ponzi scheme.

good finance articles: http://heavysidetrade.blogspot.com/

[nezumi]

Selling US debt still works because there are (yet) no suitable alternatives. So, at present, there are buyers. But, as bonds can be traded freely, keep in mind that nobody intends to hold the longer term bonds to maturity. At present many might hope to get rid of them once they might become unattractive when compared to other investment opportunities. So, right now, there are buyers. There will be sellers, if interesting oppotunities arise elsewhere, when the global economy recovers. Although I was personally surprised that the fate of the global economy was still this linked to the US's, it might nevertheless come to pass that everybody but the US will recover earlier. Then interest rates will rise, and demand for bonds will shrink. Not being at this point yet does not mean its not going to happen.

[Soulsurfer]

No word on Huffpost about another auction...­.........I­raqi oil leases. Exxon-Mobil and BP with the Chinese were bidding on oil fields yesterday in the Green Zone.............

[vippy]

And just who buys those? Our friends in Europe are broke themselves so who is it. China already has more from us, why would they want more, Japan has its own problems, so exactly who is it
that is doing the buying????

[joebaggadonuts]

Your ETFs? The Saudi's looking to recycle oil money into F22s? Would be nice to know.

[Hdaryl01]

Gee, now this is really unamazing.

The Fed Discount window currently loans money to the money center banks at 0-.25% interest. Treasuries, depending on maturity, are currently paying what percentage return/discount rate? 3-5%. Do the math......

This situation will continue as long as the interest stays the same, obviously it can't go lower. Although, based on the Treasury bond prices, it actually is. We are PAYING the big banks to borrow our money, and "invest" it in our treasuries at a profit......

However, what happens when inflation creeps in.....and interest rates need to be raised.....and bond yield discounts and returns need to increase.......

[Gewyne]

I suspect you have hit the nail on the head - Tax payers are paying large amounts to Banks and Funds to buy government debt, the short sightedness of it is sickening.

[joebaggadonuts]

Ja, but the discount rate is for up to 9 months and the treasuries are for a year, no? There is still some risk there that the discount rate goes up for the longer termed treasuries for more than the time they get the cash at discount. If we move to hyperinflationary times, the FED will have to raise this rate very quickly, swamping this profit.

http://www.investopedia.com/terms/d/discountwindow.asp

[jerrypl]

What is behind this purchase of bond debt? Do third world central banks see their currencies heading into hyperinflation?

http://eye-on-washington.blogspot.com

[fairdebate]

mmm..the smell of poverty,in­flation,an­d third world country in the air

[cbates]

The potential of this country lies in its free people. The investors know this and will make big bucks of the treasuries.

[fifty8]

CNBC admits to manipulated market that continues to be propped up by government intervention and manipulation

http://www.marketoracle.co.uk/Article11669.html

[gemzenith]

Wow,what a tease.Drop a bomb like that with the what,but leave out the who.

[Enid]

There is some fancy footwork in this. Big insurance companies ? banks ? foreign dollars.
One of you experts pick it up yet.
List of Treasury note buyers please ?

[berryessence]

they bought it because it's summer...getting ready for 3rd quarter rally

[MIKEBC]

America is still great despite what right-wing conservatives are trying to do, turn it into a third world banana republic.

[smchp]

They already did and the effects are going to take years to dig out of.