Dollar Collapse Update: Fed Buys 90% Of New U.S. Bonds, CHINA Overtaking US As Global Trader, And The Global Economy Has Done A Complete 180, Now It’s The US’ Turn To Be Weak.
December 3rd, 2012
Treasury Scarcity To Grow As Fed Buys 90% Of New U.S. Bonds
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.