UK increased buying of US Treasuries ?

[jakeXT]

http://www.treas.gov/tic/mfh.txt

As an aside, one reason that I suspect the Federal Reserve is reticent to be audited concerns the UK purchases of Treasury bonds. One might wonder how an island nation that is mired in a deep and profound fiscal crisis finds itself in a position to buy so many Treasury bonds. Where did the money come from?

While part of the answer lies with the fact that the UK banking center often operates as a pass-through for other entities (like Saudi Arabia, for example), it could also be operating on the behalf of other official parties. Like the Federal Reserve, perhaps? While that is rank speculation, it would certainly be nice to have a simple audit put such nagging worries completely to rest.

http://www.chrismartenson.com/blog/dollars-treasuries-and-indebtedness/26572

[kickysnana]

1. Google the story about the US treasuries captured in Italy heading into Switz? n/t

[prostomulgus]

2. They know that President Obama will make sound choices.

President Obama is pulling the world out of the global depression that bush put us in. Everybody sees it including foreign govts. They know that, as his policies take effect, the US economy will take off like it did in the 1990's when Bill Clinton was President. This will strengthen the dollar and these govts. want in on the action.

It's a vote of confidence in our President's policies. If we could get cap-n-trade, universal single payer, and card check then the entire world would be scrambling to buy Treasuries.

[ixion]

3. uh, not 'everybody'

I, for one, don't see this glorious recovery of which you speak.

In my opinion, they buying bonds to try and keep the status quo system going, even though it's D.O.A.

And, no, the economy is not going to bubble up again like it did under Clinton.

While alternative energies might have provided a means of creating jobs, that movement is being smothered by the folks in the WH and Congress, as a favor to the Big Energy lobby.

So the only happiness you're going to see is in finance and security, just as it was under Bush.

[wuvuj]

4. China is putting a lot of it's money...

...into commodities...the new world wide currency.

[notesdev]

5. Central bank swap lines

Bernanke gave $500B to foreign central banks so that they, rather than he, could soak up the massive T-bill issuance. It's monetization with a thin veneer of deniability. The UK elites, being tied to the hip with ours on this one, naturally have a strong interest in keeping the game going.

[jakeXT]

6. He als mentioned agency debt in an earlier article

The shell game

Have you ever seen a sidewalk magician run the shell game, where a pea under a shell is magically shuffled around - now you see it under this shell, now you see it under that shell, now it disappears completely - or does it? The more it moves around, the more confused you get. If you can only figure out which shell the pea is hidden under, you win! But where is the pea? The point of the game, from the perspective of the street hustler, is to use complexity of motion to confuse the mark.

These are the three critical points to remember as you read further:

1.The US government has record amounts of Treasuries to sell.

2.Foreign central banks, which have a big pile of agency bonds in their custody account, would like to help but want to keep things somewhat under the radar to avoid scaring the debt markets.

3.The Federal Reserve does not want to be seen directly buying US government debt at auctions (and in fact is not permitted to, but many rules have been 'bent' worse during this crisis), because that could upset the whole illusion that there is unlimited demand for US government paper, but it also desperately wants to avoid a failed auction.



For various reasons, the Federal Reserve cannot just up and start buying all the Treasury paper that becomes available in record amounts, week after week, month after month.

Instead, it uses this three-step shell game to hide what it is doing under a layer of complexity:

Shell #1: Foreign central banks sell agency debt out of the custody account.

Shell #2: The Federal Reserve buys those agency bonds with money created out of thin air.

Shell #3: Foreign central banks use that very same money to buy Treasuries at the next government auction.

http://www.chrismartenson.com/blog/shell-game-how-federal-reserve-monetizing-debt/25806