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Old 08-12-2011, 10:18 AM   #1
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Default The U.S. auctioned $72 billion of notes and bonds

The U.S. auctioned $72 billion of notes and bonds

By Daniel Kruger - Aug 12, 2011 12:00 AM

The U.S. auctioned $72 billion of notes and bonds this week at the lowest average yield for a refunding on record, saving taxpayers $647 million in interest payments during the life of the securities less than a week after Standard & Poor’s removed the nation’s AAA rating.

The Treasury Department paid an average yield of 2.13 percent on the three-, 10- and 30-year securities, less than the previous refunding auctions in May of 3 percent and below the former record of 2.59 percent in February 2009, according to data compiled by Bloomberg. The government began selling 30-year bonds on a regular schedule in 1977 as part of its so-called quarterly refunding.

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Old 08-12-2011, 09:33 PM   #2
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If I am interpreting this correctly it is not necessarily good news.

People are running scared and seeking venues for capital preservation .

The primary refuges being US treasuries and precious metals.

Some of the implications are .......

# Putting more liquidity in to the system may not work
depending on how it is done . When borrowers are scared of borrowing
and lenders are scared of lending there is no point making more
liquidity available to banks.

# If you print money with the intent of giving it to people to spend
that may not work either because it could make the public more afraid of
holding cash ( perceived as a risky asset ) and that in turn may
accelerate a rush to capital preservation and a deflationary spiral .
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Old 08-13-2011, 01:19 AM   #3
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who bought them ?
didn't Obama officially manipulate the bond market
in 2009 with $300B (AFAIR)
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Old 08-13-2011, 10:59 AM   #4
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I believe the evidence suggests mainly genuine buyers rather
than manipulation .

If so then such a result is consistent with fear driven purchase
of Treasuries . After gold US treasuries are widely perceived as
the least worse option as refuge for wealth .
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Old 08-13-2011, 01:19 PM   #5
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Bottom line; everyone else's debt is so toxic that our downgraded T-bills are still king. This is a sobering indicator of the true state of our global economy.
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Old 08-13-2011, 07:45 PM   #6
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Last edited by Ross; 08-16-2011 at 05:24 AM.
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