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The World is buying US notes and bonds in record numbers

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posted on Aug, 18 2009 @ 08:01 PM
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Great now all they need to do is sell another 1.7 trillion by October (if obamacare doesn't pass) and they can cover the debt for this year. That is assuming the Fed doesn't monetize any of the debt... (which we know it already is) we only have 95 more of this upcoming year's deficit to sell in the next month and half.

My suggestion.... hope for the best and prepare for the worst.

I myself will be investing in ammo, food, water, and supplies, long before I invest T-Bills.

[edit on 18-8-2009 by Anonymous Avatar]




posted on Aug, 18 2009 @ 08:02 PM
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reply to post by GreenBicMan
 


Much will depend on how the FED and .gov programs play out & how effective any exit strategies they end up implementing work out.

From TARP to QE, there's a lot of ground I would consider a minefield to cross.

The evidence is already out there pointing to a deflationary spiral, which is exactly what Ben's Thesis was supposed to be able to avoid at all costs.

Here's a couple of blog posts on that

economicedge.blogspot.com...

economicedge.blogspot.com...

For the foreign holdings, the shorter the term, the better chance they have at redemption, regardless of whether Ben succeeds or fails.



posted on Aug, 18 2009 @ 08:03 PM
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reply to post by RussianScientists
 





I have to expose your thread ProfEmeritus as "NOT TRUE".

Actually, Martenson seems to be toning down his original rhetoric. Here is a follow-up response to John Jansen:




Across the Curve

A daily bond market chronicle

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Disinformation in the Blogosphere: Chris Martenson Responds
August 8th, 2009 2:43 pm | by John Jansen |

Late Thursday evening I pennned a piece which responded to a post at the blog Zero Hedge which had originally been written and posted at the blog of blogger Chris Martenson.The piece by Mr Martenson discussed the most recent 7 year note auction and the subsequent Open Market Desk purchase of nearly $ 5 billion of those bonds while the ink han not yest dried on that bond.

Mr Martenson posted a response to my post in the comments section of that post. It is well written and I think that more eyes will have a chance to read his thoughts here rather than in the comments section.

Here is his response in its entirety:

Hello, Chris Martenson here.

[Note: I left a similar comment at Naked Capitalism]

Just wanted to say that while I applaud the interest in this subject, and I am in awe of the knowledge on display here, I believe that some of my words and intent have been taken out of context or misinterpreted.

1) My only point in raising the specific 7-year CUSIP purchase by the Fed last week was in the context of the troubled 5-year auction being followed by a miraculous 7-year auction that now appears less-than-miraculous due to that fact that the fed took 47% of the Primary Dealer take off their hands a few days later. Yes, that’s a dot-connection that seems entirely relevant to me not because it reveals a greater degree of manipulation (the $1.25 trillion MBS target seems a tad larger to me…) but because it possibly reveals that there’s rebellion brewing in the Treasury auction world. While this may be over-reaching, it could also be legitimate spoor to be read as we try and illuminate some of the path before us. I was not, repeat not, making any overt claims about the extent of monetization in my post, just that one odd coincidence concerning the 7-year auction. I do collect and have all the base data for all the auctions and I track them closely and the Fed is very much on track with what it said it was going to do so there’s not much of genuine interest there for me yet. But stepping in to assure a “good appearance” at a critical auction. I consider that quite interesting and newsworthy.

2) My comment about “A more honest and open approach…” for the Fed to pursue, as my long-time readers will attest, was not a comment about what is legally permissible by the 1913 FR Act (yes, I’ve read the whole thing) or normal operating procedure (yes, I know how the Fed & Treasury operate) but rather just another statement about another way that complexity obscures our official monetary and fiscal actions. I regularly opine that we would be better off by being more straightforward in our official reporting and actions. I honestly didn’t know that this piece, out of the thousands that I have written, would catch a bit of internet-lightening and so I wrote a quick piece with my usual audience in mind. In retrospect I wish I would have framed that sentence a bit more because it is now being bandied about as proof that I don’t know how the Fed actually operates and, therefore, the rest of the piece (and maybe more!) is bunk as well. Ah well, such is life on the intertubes.

So that’s it, I think it smells that the 7-year auction seemingly went so well the day after the 5-year fiasco and then days later we find out that the Fed bought nearly half of the total load carried by the Primary dealers.

Perhaps it’s just a quirk in the largest bond auction week in history, or perhaps it portends a dangerous shift in Treasury appetite and is a sign that the greatest bubble of them all (Treasuries) has a small tear developing at the edge. I will continue to track the edges of this fascinating story because I personally don’t want to be in the position of someday reading about it above the fold in the NYT with everybody else.


This entire affair is far from settled, in my opinion. So far, we have two bloggers, one of whom, Martenson, makes a living selling analysis of financial data. In my opinion, all he has done is present some interesting facts, which COULD be interpreted as fraud, but could also be just coincidence.

Personally, I don't have a dog in this fight, so let's just see where this goes.
If anyone truly believes that US law has been broken, please feel free to contact the US Attorney, with your proof. Of course, if Martenson believes that he has the proof, he has an obligation to report that also.

When he does that, and it is proven that the Fed has acted illegally, then I will believe it. Until then, this is an open question.



posted on Aug, 18 2009 @ 08:04 PM
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reply to post by redhatty
 


I agree with your last paragraph of course.

I would be very interested though because Germany cant even sell all their bonds if you remember back a few weeks ago they had a horrible time with the auction

There is DEMAND for ours at least.. whether that be through the pockets of uncle ben or not.. he has of course already told us he will be purchasing xxxx amt through December though, so perhaps during this period speculation is worthless and we will see in JANUARY?



posted on Aug, 18 2009 @ 08:22 PM
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reply to post by GreenBicMan
 


New Zealand, Philippines, India, S. Korea, China, China again, India again, Vietnam, Sweden (LATVIA), UK, Sweden again, Angola, Slovakia, Malaysia, Thailand, S. Korea again, Philippines again and Germany have all had failed auctions this year alone.

BTW, those are in reverse chono order, most recent first. I hope all those links embed properly!

ETA: BTW, for all intents & purposes WE (the US) had a failed 5 yr auction recently too.

[edit on 8/18/09 by redhatty]



posted on Aug, 18 2009 @ 08:22 PM
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People also need to be aware that Martenson has been pushing his "The end of Money" routine for many years now. His connections to gold and silver brokers is also well known. Everyone has an angle, and his is rather obvious. Again, selective reporting is what most of these hucksters use. If a respected independent financial organization comes forward with supporting evidence of intent, that would be another story.
I'll wait for truly independent analysis, not huckster analysis disguised as independent.



posted on Aug, 18 2009 @ 08:29 PM
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Of course they did. If you stop feeding the queen the colony dies.

No mystery there I would do the same in their position.

Stalling the great depression II can only last so long.



posted on Aug, 18 2009 @ 08:32 PM
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reply to post by redhatty
 


Good info there

Hope we never have to see USA at the end of that list



posted on Aug, 18 2009 @ 08:37 PM
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reply to post by GreenBicMan
 


I did have to go back & edit that to mention the US 5 yr that was basically a fail.




posted on Aug, 18 2009 @ 09:26 PM
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An Interesting Find, In CHINA's News, the story is quite different.

The translation of This link through Google translator


Title: China's massive holdings of U.S. Treasury bonds began to stop sending letters: BBS side of the space station (Tue Aug 18 10:54:46 2009, the United States and East)

According to the U.S. Treasury Department data released on the 17th, as at 6 at the end of China's holdings of U.S. government bonds 776,400,000,000 U.S. dollars, in May, compared to 801.5 billion U.S. dollars of holdings, a decrease of 25.1 billion U.S. dollars, to reduce by more than 3%. This is also the first time in the past year, China's large-scale reduction of U.S. Treasury bonds.

It is worth noting that the reduction in China, the United States government bonds held by the country's second-largest in Japan, a substantial holdings in June 34.6-711.8 billion U.S. dollars, "one by one by," with China to further reduce the holdings. The United Kingdom as the country's third-largest holding, in May from 163.8 billion U.S. dollars of holdings to 6 at the end of the 214 billion U.S. dollars, increasing 50.2 billion U.S. dollars, an increase of more than 30.6%.

China in April this year has been 4.4 billion U.S. dollars of U.S. Treasury holdings to float downward.(JIANG Rui Fang Yao both)


ETA: A better translation:


According to the data published by the US Treasury Department on August 17, by the end of June, China's holdings of US Treasury Bonds (T-bonds) totaled 776.4 billion USD, down 25.1 billion, or 3.13 percent compared with the country's 801.5 billion USD T-bonds holdings in May, indicating China's first massive offload of US debt in 2009.

Japan, the second biggest holder of US T-bonds has purchased 34.6 billion USD of US T-bonds in June, adding its total US T-bonds holdings to 711.8 billion USD. The UK, US debt's third biggest holder, holds 214 billion USD T-bonds by the end of June, up 50.2 billion, or 30.6 percent compared to its 163.8 billion USD of US debt holdings in May.

China has offloaded 4.4 billion USD of US T-bonds in April and increased its holdings by 38 billion USD in May.

Source

So is it just me or does this say pretty much the opposite of the article in the OP??

[edit on 8/18/09 by redhatty]



posted on Aug, 18 2009 @ 09:47 PM
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reply to post by ProfEmeritus
 


Cool. Oil will rise again.





posted on Aug, 18 2009 @ 09:53 PM
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Here is the latest US Treasury Data on Treasury holdings by country

I see more total value down than up



posted on Aug, 18 2009 @ 10:50 PM
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Originally posted by redhatty
reply to post by ProfEmeritus
 


Sorry Prof, it's actually the other way around, they are dumping long term T's and buying shorter term T's.

The article groups Bonds and Notes together in one accounting, not separate.

They are worried that we won't be able to pay at all in 30 yrs.

And, they have redeemed much of the bills they have been holding, rather than roll them over, which is why the #'s have decreased


I was about to say this, they aren't dumping the 30 though, they just aren't buying it, more debt is now held in short term bonds than at any other time in U.S. history, and the ratio between long term and short term t-notes is at an all time high.



posted on Aug, 18 2009 @ 11:10 PM
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Originally posted by Zosynspiracy
The rest of the world is at their wits end financially. If we go so goes the rest of the world in all honesty.


Oh, that again?



And if we start to go don't think for a second our government would not invade and take what they/we need to survive.


Like what? Iraqi oil and Afghan opium?


Foreign countries are powerless to stop our debt based monetary system that allows the US government ungodly amounts of power and manipulation


Or, they'll simply stop buying...




posted on Aug, 18 2009 @ 11:17 PM
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reply to post by ProfEmeritus
 


Well part of that is because the deals are only going through if
the Fed promises to but them right back.

Its crap paper going in a circle with "supposed" buyers only
holding for a short while.

We saw a failure of the 5 year bond sale of T-bills.

market-ticker.denninger.net...

Then the failure of the 7 year bond sale of T-bills.

market-ticker.denninger.net...

The march warning sign

The september deadline becomes the october deadline

Secret T-bill buying by the Federal Reserve occurring ???

Add these up and the writing is on the wall.

Here in just a few weeks to months we could see things unravel.



posted on Aug, 18 2009 @ 11:18 PM
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reply to post by yellowcard
 


I promise you, at each and every POMO/TOMO/TIPS buyback that the FED holds, 30yrs are being unloaded by those holding them, domestic or foreign.



posted on Aug, 19 2009 @ 12:08 AM
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June [net official] foreign capital flows were actually positive.

Shorter maturities (Treasury Bills) - negative.

Bonds & Notes - positive.



Grand Total:

May - 3293.1

June - 3382.4


Treasury Bills:

May - 586.2

June - 571.7


T-Bonds & Notes:

May - 1701.3

June - 1723.8

TIC



China purchased $26.6 billion in long-term T's...sold $51.7 billion of Short Term T's....apparently chasing the higher yields that existed in the June 10yr - 30yr. Remember , Geithner was visiting Beijing in June...so who knows what kind of cattywompus deals may have been struck.

Hi ProfE. For my $ , the take-a-way from your Bloomberg piece was....


Total monthly foreign investment flows were down $31.2 billion in June, compared with sales of $65.7 billion in May. Link


Total foreign investment flows = Official & Private.

The proprietor of nowandfutures.com , 'Bart' , is quite the chartista. I was unable to locate these charts on his website , but you can view his updated TIC data...in outstanding graph-form here.

On his second chart , note the June bump in TIC net long term securities , and the below zero TIC net total.



posted on Aug, 19 2009 @ 04:36 AM
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Pimco Says Dollar to Weaken as Reserve Status Erodes



Aug. 19 (Bloomberg) -- Pacific Investment Management Co., which runs the world’s biggest bond fund, said the dollar will weaken as the U.S. pumps “massive” amounts of money into the economy.

The dollar will drop the most against emerging-market counterparts, Curtis A. Mewbourne, a Pimco portfolio manager, wrote in a report on the company’s Web site. The greenback is losing its status as the world’s reserve currency, he said.

“Investors should consider whether it makes sense to take advantage of any periods of U.S. dollar strength to diversify their currency exposure,” Mewbourne wrote in his August Emerging Markets Watch report. “The massive amounts of U.S. dollar liquidity produced in response to the crisis” have helped reduce demand for the currency, he wrote.

The Dollar Index, which tracks the greenback against a basket of currencies, touched 78.823 today, the lowest this week. It has fallen 12 percent from this year’s high in March as U.S. authorities pledged $12.8 trillion to combat the recession. China, the world’s largest holder of foreign-currency reserves, and Russia have both called for a new global currency to replace the dollar as the dominant place to store reserves.

“While we have not yet reached the point where a new global reserve currency will arise, we are clearly seeing a loss of status for the U.S. dollar as a store of value even in the absence of a single viable alternative,” Mewbourne wrote.

The U.S. government boosted spending and the Federal Reserve bought bonds to revive credit markets that seized up after financial companies posted $1.6 trillion in writedowns and losses, raising concern there is an oversupply of greenbacks.


bloomberg.com...



posted on Aug, 19 2009 @ 08:27 AM
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reply to post by redhatty
 


That is exactly what I see also, we already had a discussion on another thread on how China is not buying as usual and also the lack of involvement when the last debt auction was held a few weeks ago.

And also the so call "undisclosed buyers" that attended the auction.

China may not be "buying as usual" but the OP said that The world is buying US notes in record numbers.

Another country that has increased the holding of US T-Bonds very substantial since the crisis began is The Emirates but no substantial enough for people to notice.



posted on Aug, 19 2009 @ 08:58 AM
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If you trace the companies buying these "investments" you will quickly find that they are shell companies owned by suspicious individuals (puppets) which you could trace back to one of the ABC agencies.




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