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The SHTF Turning Point Quietly Happened, Last Week – Have you been Paying Attention?

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posted on Aug, 2 2009 @ 04:08 PM
The moment many of us have been waiting and preparing for happened last week – it happened quietly but surely. Are you prepared for the Real SHTF events coming; now that last week’s event happened?

What was that event, you ask?

Well the Fed had the largest bond/T-bill auction last week. Which as you know that is the U.S. debt that is put up for auction for investors and countries to buy. Of course China has always been right there, staying behind the U.S. and purchasing our debt. There have been threads I and others have done about China being worried about the U.S. debt, besides wanting to attach inflation to the dollar.

When the first two auctions happened – I was searching everything I could about them.
I found this article right after them:


And here's the math:
1.923 BTC X 61.59% Primary Dealer bid = 1.18 BTC (PD), greater than 1.0. Or to put it a different way, but for the primary dealers the bid-to-cover was less than one, meaning that some of the issue would have been left on the table.
Thats a fail; but for the primary dealers the issue would not have subscribed.
Primary dealers are required to bid. That's the deal in exchange for their being named as "primary dealers." For this reason short of thermonuclear war you will never see an actual (BTC < 1.0) "fail" on a US Treasury Auction - Treasury has rigged the process so as to insure that cannot be reported.

Therefore, the question is this: Less the primary dealer "bid" (forced by agreement) was there sufficient interest to subscribe the issue, and the answer is NO.

Those who think this is "no big deal" need to have their head examined. In general any BTC under 2.0 indicates a serious problem, and the perverse nature of the primary dealer system is the reason.

The United States' Credit Card (issued by China and Japan) is being slowly cut off. That the stock market "recovered" after this ridiculously bad auction (bow-wow is the best way to describe it) speaks to the vacuum between the ears of both the cheerleaders in the mainstream media and those in the equity markets.

There is only one other time in recent memory that we've had a bond market auction fail like this. You might want to go have a look at your charts - with dates - for what followed shortly thereafter.

They're going to try to sell 7yrs tomorrow, and then the real fun begins with the quarterly refunding. That ought to be a real riot.

The next day – I began searching for the results of the 7 year bond sale.WOW – amazing, you would never guess what I found…… the 7 year auction went Fabulous!

My first thought was B.S!!!! There is NO way that a 7 year Fed bond auction would go better than the 5 year! I decided to keep hunting on WHO purchased those 7 year bonds, because to me – it did not smell right!

Link to 7 year bond auction info:
Oh please notice the place a PTB company is the one who released how well it went.

NEW YORK, July 30 (Reuters) - Though the stellar seven-year auction creates a positive tone ahead of the refunding, anxieties created by unimpressive two- and five-year auctions this week will linger as long as the market sees a growing load of debt headed its way.

At Thursday's auction, seven-year demand overall was above average, measured by the bid-to-cover ratio of 2.63. A gauge of foreign and institutional investor interest, the indirect bidder category, was stellar at more than 62 percent.
In another sign of strength in the auction, yields were below expectations, gauged by trading in the when-issued market. In contrast, two- and five-year auction yields came in above market expectations, which is known as a 'tail.'

'Overall it was a pretty good operation. There seems to be a lot of appetite, given where yields are, for notes in the belly.'

The two-year sale was lackluster and the five-year auction went downright poorly before the seven-year marked a recovery.

Notice this month will bring the 10 and 30 years bond sales.

Once I read how well the 7 year went, I thought “sure it did, the Fed lined up their cronies to purchase the debt”. I also thought “ the Fed is probably the one buying the debt themselves”.

I wanted to find out more, because the Fed, would need to cover up the fact NO ONE has confidence in the U.S or the dollar anymore. Also, I wanted to know if China purchased bonds.

So, yep…. More research was needed. Guess what I found?

A nice little article from the Wall Street Journal. The link is through GATA – because otherwise you need to have an account with the WSJ to read the article.

Shaky auctions of Treasury notes this week reignited concerns about whether the government can attract buyers from China and elsewhere to soak up trillions in new debt.

A fuse was lit this week when traders noted China's apparent absence from direct participation in two Treasury bond auctions. While China may have bought Treasurys just before the auctions, market participants read the country's actions as a worrying sign that China and other foreign investors may be ratcheting back purchases at a time when the U.S. is seeking to fund a $1.8 trillion budget deficit.

This week alone, the U.S. deluged the bond market with more than $200 billion in record-size sales. The U.S. has had little trouble finding buyers in recent months. But that demand is fading, and the Treasury market has become volatile.

Tension on Wall Street trading desks began building late last week when the Treasury surprised the market with plans for a record week of sales. A Monday sale of $90 billion in Treasury bills with maturities of as much as a year went well. But China appeared absent from the following two sales, which totaled $81 billion of debt, traders say.

By Thursday morning, trading-desk heads were frantically working with clients to ensure a better fate for the $28 billion seven-year note auction. It did fare far better, allaying some concerns.

"We believe by maintaining the deepest, most liquid market in the world, we will continue to attract capital from a broad array of investors," said Andrew Williams, a spokesman for the Treasury Department.

Details about the auctions aren't revealed by the government until weeks later. Overseas buyers initially are lumped together into a category known as "indirect bidders," giving little insight into the origins of demand. It may be months until more thorough data on foreign-government buying are released by the U.S. Treasury. Foreign investors had been substantial bidders in recent Treasury auctions, even though their holdings of Treasury debt had started to wane. But this week's auctions renewed worries that central banks and other buyers will start selling more aggressively.

"If this trend continues, it could reflect foreign buyers' increasing concerns about the creditworthiness of the U.S.," said James Bianco, president of Bianco Research.

While no one at State Administration of Foreign Exchange, which manages China's $2 trillion, would comment on the latest Treasury auctions, the government has left little doubt it fears the portfolio is at risk.

Clipped comments from government officials, amplified by state media editorials, point to a worry the U.S. will ultimately address its massive debt obligations by permitting inflation to rise or letting the U.S. dollar sink –- factors that would erode the value of Treasurys owned by foreign investors such as China.

At economic talks in Washington this week, senior Chinese officials gave their Obama administration counterparts an earful about the burgeoning U.S. budget deficit. China made clear it wants the U.S. to "protect its investment assets" for the good of the bilateral relationship, as the state-run Xinhua news agency reported.

If you read between the lines above, you will see the WSJ is even hinting and questioning who exactly purchased the bonds, if China did not. Plus did you read the part of the scrambling around by the Treasury Dept, before the 7 year bond auction?

In other words – the govt. won’t reveal who purchased the bonds – the buyers will be lumped together – but did you notice the MOST IMPORTANT INFO? CHINA WAS ABSENT for the bond sales, except for the One year ones!

This was the moment many have been preparing for, when no other country will buy our debt anymore – there is no longer confidence in the U.S. dollar. Also imagine what is going to happen with the longer bonds coming up this month. Oh, I am sure the Fed will print up the money to buy the debt though – they will most likely do it through Goldman Sachs, J.P. Morgan and companies such as that.

The above is actually Very Important information – the SHTF event happened regarding T-bills, in reality – buyers are scarce.

Also – on Friday the dollar index went to the lowest this year – it fell almost a full point on Friday – that means – other countries know the truth of what is happening. BTW: did you notice what gold and silver did Friday?

So, have you been paying attention? Have you positioned yourself and are you ready for what is coming? Because I and many others have been waiting and watching for this to happen – well, it did! So, now comes all the SHTF scenarios in the not too distant future.

Oh, sorry this is so doom and gloom, but sometimes the information/truth and facts are hard to handle.

All articles were shortened to fit on one page - made it barely!

posted on Aug, 2 2009 @ 04:32 PM
reply to post by questioningall

Well done,OP!

Warnings of the inevitable have fallen on deaf ears for some time now. Close to a year ago everybody appeared to be on the edge of their seat waiting for gold to bust out? When metals were artificially suppressed in order to hold the dollar inflated, seems everyone shrugged it off as a false alarm? High on Obama, they apparently talked themselves down from the ledge with wishful thinking! I imagine were closing in on the big reset? Metals may finally be allowed to make their move!


posted on Aug, 2 2009 @ 04:33 PM
very informative info thanks much. anyone that thinks things are just going to keep sailing along have a rude awakening real soon.

posted on Aug, 2 2009 @ 04:36 PM
If china did still buy 1 year bonds, does that mean we've still got some months left before the dollar collapses?



posted on Aug, 2 2009 @ 04:41 PM
Nice post - I was only speaking to some people today who were telling me that we're through the worst.... I think we're just at the beginning.

posted on Aug, 2 2009 @ 04:47 PM
Thanks for the information. I believe something screwy is going on that the American public in general is not following but foreign governments know about. Your post helps to clarify that.

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posted on Aug, 2 2009 @ 04:47 PM
first off, Q, I appreciuate the effort you have put into researching and preparing this for us.

Now, to the uninformed, fearful perspective. (mine)

It is so hard to know what to believe where the economy is concerned. As one that doesn't really have any money anyway, investments, gold, silver, they are all interesting discussions, but aside from the impact on the price of a loaf of bread, it's hard to see how they impact me.

I understand that the US is in a BOATLOAD of debt. As far as I know, it's been that way for a long, long time. The government keeps spending, on things like war and weapons, and we keep amassing an amount of debt that is a number that before not so long ago, was not even a practical number, where money is concerned. It doesn't take an economist (thank God, cuz I suck) to realize that we are in a poop of a lot of trouble.

It seems to me like there have always been other governments willing to buy our debt, because we were thought to be good for it. Now it seems, by way of your report, that it isn't the case any more.

My first problem: There are those on here that tell us everything is fine and that historically, we HAVE to see an improvement, because that's what history tells us. I struggle with that because never in history have we had such a huge debt as a nation, so how could historical precedents apply? I'm told in a nutshell that if I don't think the economy is going to improve, that I'm an idiot. I'm told that things like unemployment, foreclosures, inflation, those are all things that FOLLOW swings in the market, and that the market has improved, or slowed it's decline, so everything else should be getting better too.

We have our president and his cronies telling us things are looking better. We have others telling us that they can't find a job. They can't afford their mortgage, or rent, or utilities, let alone payments on THEIR debts. Whether or not they should BE in debt is not the issue, to me. Though it is very important and in my opinion our NATIONAL economy, represented millions of times in these defaults, it is hard to accept that the lifestyle encouraged in this nation for many, many years, was to accumulate debt.

So now, here we are. A small percentage of our population positioned to ride out what could be a complete disaster, and the vast majority of everyone else, set to wait in soup lines for a meal.

My second problem: Again, I appreciate your effort in bringing this to our consciousness. What are our options? What are we supposed to do? Do you have any recommendations for those of us that don't have a large nest egg? What should we be doing, just to be sure we are as safe as we can be for our family?

I know it won't be long and there will be some people chiming in that are convinced that this is nothing to worry about. I prefer to be prepared for the worst, but hope for the best. Hope does not feed my children. Hope does not keep a roof over my head. If I had a couple grand in the bank, what should I be doing with it? Will it be worth half of what t is in a few months? What are your gut feelings about what the average person, or someone on here should be doing?

I hate being ignorant, but the volume of information required for me to make an informed decision is staggering and disheartening. I don't KNOW economics, which is probably why I'm in the boat that I am, but I think I'm a fairly good person and I don't want my children to suffer. What is the line between paranoia and preparation on this one?

Thanks for all your time, Q.

[edit on 2-8-2009 by KSPigpen]

posted on Aug, 2 2009 @ 04:49 PM
reply to post by Zerbst

Actually, don't expect metals to be flying up any time soon - now there are more shorts against it - More than Ever!!

The desperation has begun - BUT if you look at EFT's they are declining because the info that the paper gold doesn't have all the physical gold to back it up. Those are falling.

Here are the graphs of Shorts against commodities - Notice anything OBVIOUS???!!

Here is the Bank - Shorts Graph

posted on Aug, 2 2009 @ 04:58 PM
Most excellent analysis OP

I was wondering how the Dollar would start its freefall...

Thanks for answering that question...


posted on Aug, 2 2009 @ 05:12 PM
This is a great post - but how long do we have before the dollar really starts to drop? Others have been telling me to buy stock in Dollar-Bearish ETFs...

posted on Aug, 2 2009 @ 05:17 PM
reply to post by JediK

NO, don't buy EFT's everything I have been reading - says NO - gold isn't there to back them up - they have been falling - because that fact is starting to leak out.

Before you do anything - Research it!!! Don't go on someone else's advice.

Just as I won't advice anyone - on what they should do.

I am providing Information - then as I always tell people - Now Research it yourself - find out and do what feels right to you.

But I do say what I have done.

That is - I have positioned myself for what I have forseen coming - by paying attention and watching everything going on. That is why as soon as the bond sales were over, I began searching for information of what happened with them.

But - this information - lends credence to the fact that the embassies have supposively been told at the end of Sept. they need to have local currencies on hand for at least surviving a year on them.

ALSO guess what?

Many countries are NO LONGER accepting the U.S. dollar in the countries - Now that is shocking - IMO - it also says A LOT!!

Look closely at metals - I will say that.

posted on Aug, 2 2009 @ 05:19 PM
Wow thanks for the info, you certainly seem to know what you're talking about. If what you say is true then we really are in serious trouble, hold on tight.

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posted on Aug, 2 2009 @ 05:46 PM
I have believed for some time now that the Fed is buying U.S. debt through proxies with U.S. taxpayer money. I believe this to be the primary reason for Bernanke being so against Paul's Audit the Fed bill.

They know China and others will not call their bluff too because doing so would hurt their remaining investment.

[edit on 2/8/2009 by Iamonlyhuman]

posted on Aug, 2 2009 @ 05:47 PM
reply to post by questioningall

Phage will be posting soon, saying 'all this is wrong, nothing is going to happen, all this means nothing, nothing unusual is happening here'.

posted on Aug, 2 2009 @ 05:57 PM

Originally posted by questioningall
So, have you been paying attention? Have you positioned yourself and are you ready for what is coming?

Maybe it would be better to short all the premises and elaborate on what is coming. All I can see is that the Chinese are no longer interested in buying US Treasuries. Since the trade deficit with China is staggering due to the Chinese uwillingness to buy anything from the USA, then they have to invest the dollars, which they are paid by Walmart and the likes, into something else -- if they keep not showing up in the auctions. More on this here:

So what is coming and when and why that would of our concern?

[edit on 8/2/2009 by stander]

posted on Aug, 2 2009 @ 06:03 PM
I find the indications troubling and your predictions chilling.
I appreciate your efforts regarding sharing your financial views.

I only hope your dire warnings and predictions equal the ones regarding the total eclipse a few weeks back whereby no dams collapsed and there were virtually zero repercussions.
Nothing out of the ordinary occurred. But if you are better at economics than the environment, I may have to worry. Cause for pause.

I don't mean to be glib, we can't be good at everything. I'm concerned nonetheless.

I will run this by my spousal unit, she is quite savvy in such matters.


[edit on 2-8-2009 by kinda kurious]

posted on Aug, 2 2009 @ 06:08 PM
reply to post by stander

Stander - I have nothing but absolute Respect for you, what you can do with numbers is unbelievable!! I go into your 911 thread - just to see what you and salty red have come up with - from the market numbers.

So, for you to be asking what I think will be happening - is amazing to me - since you can do things with numbers I couldn't even begin to think about!

The fact China or another country won't buy our debt will put us basically in bankrupcy and failure - printing money as we have already been doing will even become a bigger job. Also - people will become intimately familiar with the word Zimbabwe - due to hyperinflation. Also - other countries literally dropping the dollar - as trading currency but even accepting it in their countries will stop.

Cuba stopped taking dollars a couple of months ago - now I have been reading that merchants in other countries - including Mexico - will not accept dollars. Also - there was an article how one country won't even accept credit cards based on dollars anymore.

We will become an island of our own - trade? Won't be happening - not in U.S. dollars.

In other words - WE will Be F'd!!!!

posted on Aug, 2 2009 @ 06:08 PM
Excellent post! Thank you very much! I hope you can wake up some of the people, or sheeple. I have been trying for years.

The US (criminal) Treasury Dept has to raise $2 trillion by 9/30/2009. If they do not, the US Govt will not be able to pay its bills. At that point, we will see the dollar collapse, the US economy collapse, and probably the world economy collapse! Probably martial law and mass unrest. If the treasury manages to bribe or blackmail a country to buy its debt by 9/30/2009, we will merely put off the ultimate, that being a total collapse of our economy and our country. It will happen, its just a matter of time. Ask any REAL Economist, not the talking heads with the $5000 suits and $500 hairdos on MSN (Main Stream News in case you did not know).

If you think this is a bunch of BS, then I hope you Have fun at Camp FEMA!

posted on Aug, 2 2009 @ 06:11 PM
reply to post by questioningall

Thanks for your great research in your OP!

I find this troubling to say the least. The maipulation that is going on behind the scenes is likely mind boggling!

This article is a nice addition to this thead...lot of insight!

On Wednesday the Treasury’s five-year auction yield was 2.69% with 21.15% allotted at the high and bid to cover was 1.92 to 1. The average of the past ten auctions has been 2.20%. Indirect, central bank participation was 35.7% versus an average of 36.8%. Overall that was weak demand. Do not forget the Treasury has to raise $2 trillion by 9/30/09.

The result of these mediocre to poor auctions has to be more pressure on the dollar, as budget deficits continue to widen.

Mortgage applications fell for the first time in four weeks, driven by a drop in demand for refinancing loans. Both purchase and refi loans fell 6.3%.

This is an early appraisal of the Chinese visit to Washington. There is no question the Chinese have the Illuminists stymied. The big question is has China demanded the rest of our high technology expertise that Bill Clinton was unable to deliver to them? Or have they pledged government properties to the Chinese?

posted on Aug, 2 2009 @ 06:14 PM
reply to post by questioningall

Great Thread, I knew that the auction block was for business in the fall but this summer sell was new to me.

Hum only few other countries will be dipping now into the desperation of the US sell out and that is the Emirates the rich oil nations are the ones that has been worked out by Geithner recently but very quietly.

In a few months we may see how much the Emirates has been "investing in Americans downfall".

Either that or the Fed is buying back the debt.
in behave of Goldman Sach with the promises of (tax payer full backing) I mean government full banking.

I am just been sarcastic.

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