Demand for Treasury securities is still high
10-Year TIPS were sold with a Bid/Cover ratio of 2.51. Almost half of the securities went to indirect bidders, meaning central banks are still bidding for U.S. government debt.
Obviously, there is no problem for Treasuries despite the huge supply.
The positive interpretation here is that there is still a significant bid for U.S. debt despite all the talk of loose fiscal policy hurting demand. The negative interpretation is that concern about the probability of recovery is starting a flight to quality.
About Edward Harrison
- Pre-payments are reducing value of mortgage-backed securities 23 Apr 2009
- Treasury yields go below zero 9 Dec 2008
- Since when has the Treasury ever pre-announced the exact maturities that they will buy and when? 24 Mar 2009
- Treasury to Consider Further Measures to Halt Housing Slide 3 Dec 2008
- Treasury credit default swaps rise dramatically 16 Jul 2008
I totally disagree with this. There is one reason to believe the person interviewed couldn’t find his rear end with both hands, a map, a gps and the lights on – inflation has NOTHING to do with cpi (which is as cooked as an Enron book). Inflation is the money supply.
We can argue all day long about banks not lending, but if China is divesting their dollar by buying commodities our USD is toast.
http://www.sprott.com/Docs/MarketsataGlance/June_2009.pdf
PS This should have been what the media was locked in on today, it is the big news and will wag the inflationary dog (inflatonary Keynsian not Austrian)
forgot url http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahNFQdXZ6fNU