Wednesday, February 17, 2010

Much ballyhoo...

...has been made about the recent U.S. debt auction and the (relatively) large % of the issue that was purchased by "Direct Take Down", which are unknown purchasers. This has caused the Black Helicopter EOTers to surmise that the U.S. has purchased the debt and therefore its time to hoist 1 Lantern and say "THE FED IS COMING TO INFLATE AWAY OUR FUTURE".

However, even if the government purchased the securities, it could actually be for completely benign purposes, a possibility completely unknown to the EOTers: They could simply be buying them for other foreign governments who do not wish to tell the world they need Treasuries, either for themselves or their member banks.

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