Posted on 10/20/2022 3:36:52 AM PDT by EBH
The long-simmering idea that the US government should stand ready to buy back Treasury securities from investors to improve market functioning is moving closer to reality.
While the Treasury Department has carried out buybacks in the past -- most recently between 2000 and 2002 -- and while its industry advisers since then have urged it to consider establishing a program, steps taken in that direction last week were more than experts anticipated.
Liquidity metrics for the US government debt market are approaching crisis levels after a year of steep losses for bonds caused by rising inflation and Federal Reserve interest-rate increases, and with the central bank simultaneously cutting some of its holdings, the situation may worsen. Treasury Secretary Janet Yellen expressed concern about it last week.
“When we warned last week that Treasury buybacks might begin to enter the debt management conversation, we didn’t expect them to jump so abruptly into the limelight,” Wrightson ICAP economist Lou Crandall wrote in a note to clients. “September’s liquidity strains may have sharpened the Treasury’s interest in buybacks, but this is not just a knee-jerk response to recent market developments.”
The specific step taken by the Treasury was in its quarterly survey of primary dealers, released Friday in connection with the financing plan to be announced Nov. 2. The 25 dealers were asked for a detailed assessment of the merits and limitations of a buyback program for government securities. When the last financing plan was released in August, the department’s industry advisers on the Treasury Borrowing Advisory Committee recommended further analysis of the issue.
(Excerpt) Read more at yahoo.com ...
This article is looney.
First, the majority are short term and being refinanced continuously.
Second, they would need to borrow, at very high rates. Or print $$$$ to have the money to buy back?
Third, the additional borrowing will only drive up inflation and interest on all outstanding debt.
Bottom line, our government is about maxed out and bankrupt.
The Democrats crashed and burned this country and will be handing the elected Republicans a Chapter 7. It’s beyond a Chapter 11 reorganization.
What’s sad is that all the Social Security Trust funds are hone too.
We are approaching 100% of tax revenue just to pay the interest on the debt.
COMPLETELY LOONEY.
I know? It is all crazy town.
Just print you way out of a financial crisis...
If this was serious conuntry we would have serious import tariffs. Tariffs raise tremendous revenue, protect and PROMOTE domestic industry, it creates proseperity FOR ALL. Historically, the USA used tariffs to pay off huge debts after many wars but since then globalist RIGHT wingers have ruined everything with FREE TRADE loonacy that started after WWII and with China “initiative” in the 1980s..
Treasury Secretary Janet Yellen aka ‘Baby Seal’
We could tariff our way out of it.
I just bought $10,000 (the maximum amount) of inflation-proof US bonds at over 9% interest. I hope they don’t target that.
However, with $31 trillion of US debt out there, an interest rate of 4-5% will bring us close to either default or hyperinflation.
This is like trying to borrow from Visa, to pay down your MasterCard, because your AMEX is maxed out!
[BUY BACK ? WITH WHAT? JUST PRINT MORE MONEY?]
You’re not supposed to notice.....
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