Selling off treasuries next week?
Posted: Sat Jun 25, 2011 1:11 amI read in the paper today that the united states is liquidating more debt. Any idea as to where? The paper failed to mention.
John_doe wrote:I read in the paper today that the united states is liquidating more debt. Any idea as to where? The paper failed to mention.
I don't know specifically to what you're referring, but they constantly have bond auctions, and the buyers are whoever they can conjole into buying at the moment. Buyers recently used to consist of primarily the OPEC nations, China, Japan. Now I don't think they are buying - they are actually selling themselves. So I think at this point the Fed (and Treasury) are probably spending a lot of time trying to prepare buyers in advance, and twisting arms to get them sold. I suspect, within the US, the Fed is transferring newly created funds into member bank balances to allow them to buy them. (Thus, effectively, printing money.) This will happen untl the interest itself on the debt becomes untenable (in theory, a few more years could pass until that happens), and/or others completely lose faith. Other currencies, such as the Euro, may collapse first. The advantage the US has (if you can call it that), is that there doesn't appear to yet be a strong internal argument within the Fed or Executive that printing money is bad, so they can do it without much debate. The Europeans have to argue amongst themselves before they can do this.
