RSSSupply And No Demand
J.J. Jackson | July 31, 2009
I wrote an article a few weeks back about a bond holder revolt that was pretty much unreported because it was far too serious of a news issue for most media outlets to bother with much less understand. As the debt load of the government goes through the roof it has been harder and harder to find buyers willing to finance that ballooning debt.
A few weeks ago there was some sign, if you ignored other indicators, that this was all not true. But CNBC is reporting that the weak sale of U.S. debt continues:
The U.S. Treasury sold $39 billion in five-year debt Wednesday in an auction that drew poor demand, raising worries over the cost of financing the government’s burgeoning budget deficit.
Treasury Building
woodleywonderworks
Treasury BuildingIt was the second lackluster showing in as many days, convincing analysts that the stellar results of debt auctions just a few weeks ago were a fluke and that Thursday’s $28 billion seven-year offering could suffer a similar fate.
Under the weight of the ballooning deficit, the government has raised auction volumes and analysts now wonder whether the strain on the market is showing.
“Obviously everyone is inferring that tomorrow’s won’t be good either,” said James Combias, head of government bond trading at Mizuho Securities USA in New York. “Maybe you will see more interest tomorrow but I think the increase in the auctions and the size of them may be starting to have an effect. These are very large auctions.”
Demand for the five-year notes was below average, measured by the bid-to-cover ratio of 1.92, the lowest in almost a year.
This spells trouble for liberal imbeciles in our government who thought that no matter how much money they printed and spent someone would continue to back their grandiose plans. Right now their little worlds are crashing down as they panic about what to do. Odds are they will just print more money to cover their obligations. Wouldn’t it be nice if we, as ordinary people, could do the same?
But we know the hard realities of the issue of spending more than we make. Eventually that debt becomes so unwieldy that it buries us. Those same laws of economics apply to the federal government but the government is adapt at playing hide the sausage and keeping that fact out of sight until it is too late and the hand basket we are all in passes through the gates of Hell.
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