Tuesday, December 04, 2012

Where are they...

...a continuing series.

Where are the pundits who called for shorting Treasuries and informed the unwashed masses that a debt crisis was imminent?

Not on this blog, which has consistently pointed out the unique position of the U.S. relative to the rest of the world.  Global debt is not a fungible item only differentiated by price and yield.  There are massive liquidity and instability risks that ONLY (at the present time) the U.S. can ameliorate.

From Bloomberg:

Even as U.S. government debt swells to more than $16 trillion, Treasuries and other dollar fixed- income securities will be in short supply next year as the Federal Reserve soaks up almost all the net new bonds.
The government will reduce net sales by $250 billion from the $1.2 trillion of bills, notes and bonds issued in fiscal 2012 ended Sept. 30, a survey of 18 primary dealers found. At the same time, the Fed, in its efforts to boost growth, will add about $45 billion of Treasuries a month to the $40 billion in mortgage debt it’s purchasing, effectively absorbing about 90 percent of net new dollar-denominated fixed-income assets, according to JPMorgan Chase & Co.

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