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.

4 Comments
  1. davosSherman says

    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

    1. davossherman says

      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)

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