The Treasury Department just released the details of its next round of debt auctions. It looks like we’ll get $37 billion in 3-year notes on Tuesday, $23 billion in 10-year notes on Wednesday and $15 billion in 30-year bonds on Thursday. Treasury also admitted that auction sizes will rise “gradually” in the medium term, and that it may get rid of 20-year TIPS auctions in favor of 30-year TIPS sales. The debt ceiling of $12.1 trillion will likely get tagged in the final quarter of 2009, but as we all know, that “ceiling” is a joke. Congress always increases it whenever necessary. Bond futures recently tagged the morning lows, and were down about 26/32 at last check.
Treasury keeps increasing the size of its debt auctions
Previous post: Pending home sales climb 3.6% in June
Next post: July jobs report comes in hot
{ 3 comments… read them below or add one }
Dear Mike:
Here, in the “capital” city of the world, NYC, there are plenty of people frothing at the mouth because so much of the TARP funds have been returned and the “toxic” paper is gaining value in recent months. The conclusion these stock brokers, turned analysts, turned radio and TV personalities bring is: “The government is getting paid back profitably for all the TARP funds, investment houses and banks are rolling in dough, unemployment is walking away dragging its tail, and of course, it is time to invest in the equity market for the raging future and get rich!
What do you think?
Jim Smith
Dear Mike:
In you recent article you say there are two ways for the debt crisis to be solved. 1. Economic Growth. 2. Taxes. What about 3. Hyper-inflation? It seems to me that inflation may be the easy way as Treasury and the Fed can easily blame it on forces beyond their control?
Is it possible for foreign central banks to buy at these auctions but sell even more of existing reserves on the open market. The result would be “good” auction results for USA and reduced net ownership of USA debt by foreign central banks. How would you know?