Chart of UUP (USD index):
Posted on 08/18/2016 11:12:36 AM PDT by milton23
In the first six months of 2016, foreign central banks sold a net $192 billion of U.S. Treasury bills, notes, and bonds. This is more than double the pace from the same time last year. China, Japan, and Brazil were the leaders in selling U.S. debt.
With the U.S. debt running at approximately $19.4 trillion, this could be problematic. A large selloff of U.S. bonds would decrease their price, or in other worlds, increase domestic interest rates in general (bond prices and interest rates always move in the opposite direction).
(Excerpt) Read more at dailysign.al ...
Hellary is hoping we’ll all be speaking Chinese by the end of her first term.
Killary is a Chi-Com operative. Hell, she even dresses like Mao, but I bet Mao’s garb didn’t run 13k a suit.
Dollar is really getting hammered today > oil ramping.
There is no sign of significant interest-rate increases. The 5-year is at 1.15%, the 10-year is at 1.56%. These rates are very low.
Understand one of the larger refineries in Baton Rouge is shut down because of the flood so increase in oil price is not surprising.
Our gas went up $.15 a gallon overnight. Bizarre and not necessary but guess the powers that be didn’t want to let a perceived but untrue crisis go to waste.
It’s going to start impacting the dollar as well. Holding a dollar denominated bond is tantamount to holding dollars. The demand for dollars can easily be overwhelmed by the excess supply of dollar denominated bonds.
If they’re selling at a record pace then somebody must be buying at a record pace. Is it the U.S.?
It’s a buyers market......
s o r o s
If foreign governments decide to stop buying our debt what will happen to the dollar?
With interest rates now near 0% and our currency depreciating, there has been no real incentive for foreign governments to want to continue to buy our debt, which is issued in the form of Treasury Bills. But do foreign governments have a choice? The Chinese, the largest holders of U.S. debt, have their currency pegged to the U.S. dollar. If they stop purchasing our debt, their currency, and thus their economy, will go right into the toilet along with ours. If they decide to sell the U.S. debt that they hold, the U.S. dollar will take a huge hit, which will in turn cause the Yuan to take a large hit. This is the inherent problem with the Ponzi scheme that has been run over the last 30 years. We consume more than we produce, and those who buy our debt continue to pump money into the system, which perpetuates the cycle. It is still possible that foreigners will make the strategic decision that their economy can withstand the short-term shock to their economy if they sell their dollar reserves. While their economy may recover, will the U.S. recover? Who will buy our debt? These questions remain to be answered by our policy makers. And so far they have continued the gamble leaving our economy, destroyed by, really, the combination of everyone since the 1900’s to the equally inept errors by the Obama administration more than doubling the debt during his administration. And selling bonds to push the destruction (kick the can) down the road while taking down social security, medicare, our back up funds, and a lot of our resources to use to stay alive is just idiocy. But it bails him and his administration out for the time being. That is unless the countries who hold our debts go beyond their capacity and start selling out and stopping sales from us. We have been left in the hands of other countries and we are extremely vulnerable.
Thanks Barack, We knew you weren’t qualified when you got elected. And you sure proved it.
red
The interest rate on 10 Year Treasuries has declined 20 basis points (0.20%) over the last six months.
Central Banks may be selling, but there are plenty of buyers.
For years these other countries have devalue their currency. Now reality is starting to set in things right. Once again Trump proved to be correct
Chart of UUP (USD index):
Expect Congress to try and pass a law requiring retirement funds be invested in government obligations.
Shoot, they’re already doing that with the use of social security funds medicare funds supporting Obamacare. And let’s face it it’s been going on for a couple of hundred years. These type of debts started when we were able to create funds for the government, even though we borrowed $75M for the revolutionary war. We paid that back rapidly. We have notoriously borrowed for wars and if you consider we’ve had a number of them, you can understand the debt. After World War I public debt was up to $25.5 billion; the New Deal and World War II resulted in one of the first sizable explosions in debt, up to $260 billion by 1950. Throw in LBJ’s Grand Society, the Vietnam War, the defense build up against the Soviet Union, wars in Iraq and Afghanistan, sweeping tax cuts and a brutal recession, and we find ourselves mired in this current mess.
Accoprding to the Washington Times, entitlement rise since 2008 is overwhelming. Welfare has risen 32%, just short of 1/3 of its bill since its creation fattened by President Obama’s stimulus spending and swelled by a growing number of Americans whose recession-depleted incomes now qualify them for public assistance.
The people that had money go broke. The people getting the additional tax money won’t get enough to not go broke. And the only people that can keep jobs as the economy tanks, is the federal government. See a correlation here? Me too.
red
It’s always entertaining to see these posts.
“Massive selling of x by supposedly really smart people”
All is lost.
They never consider the other side of the trade.
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