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Liquidating bonds

liquidating bonds-63

Buy little by little on the way down and a little more once it comes back up. When inflation returns with a vengeance, they will skyrocket in buying power while the dollar tanks.

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Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure.Certificates of deposit (CDs) or short term commercial paper are considered to be money market instruments and not bonds: the main difference is in the length of the term of the instrument.Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in the company (i.e., they are owners), whereas bondholders have a creditor stake in the company (i.e., they are lenders).In October, while foreign official entities sold another $45 billion, at least the pace of selling by private entities moderated somewhat, to "only" $18.3 billion. When you as a country can make loans or debt agreements in the euro, yaun or yen, call me. Even China is stuck with the Dollar as it's reserve as there is not enough yuan of actual value in international markets. Meanwhile, while just four months ago yields had tumbled to near all time lows, suddenly the picture is inverted, and long-yields are surging on concerns that not only will the ECB and the BOJ soon taper their purchases of the long end, but that Donald Trump is about to unleash a $1 trillion debt tsunami at a time when the Fed will not be available to monetize it, now that the Fed is again hiking rates. As well no government can offer a loan or bond in yuan, yen or euro. Don't get sucked in to the media smoke and mirrors. In the process, China has now been overtaken by Japan for the top US creditor position in terms of total holdings with $1.132 trillion, for just the second time. Like everythign else on the planet, gold prices are rigged and these buyers are taking advantage of someone elses bad position. Look where we are now, $20 TRILLION in the hole and no way out.

It wasn't just China: Belgium, which has long been rumored to be the venue where China's keeps its "secret" offshore Treasury holdings couretsy of Euroclear, also dumped its TSY holdings, and in October its stated holdings (which again have to be adjusted for MTM), tumbled from $143Bn to $117Bn, the lowest since the summer of 2015. Yes, summer is here but I live at 12,800 feet so, well, you know the physics. With only $1.2 trillion dollars and coins in circulation, this could become a problem for the imagineers at the Fed and criminal cartels.

As trade slows, EM currencies (including Yuan) fall causing USD demand to pay back local USD denominated debt as soon possible. Pretty sad, that's the best debtor situation around in terms of nations. What about those stealth Treasuries which we are not supposed to know about?

CB's then sell their treasuries to get those dollars to meet local demand. Stack the phyzz Ag in 20 ounce chunks..scumbags might monkey hammer it lower, so don't go all in. And when that ratio comes down to under 30:1 start trading a little phyzz Ag for phyzz Au China is buying vast amounts of gold and also strategic metals used in manufacturing, like copper, beryllium, titanium, etc.

One month ago, when we last looked at the Fed's update of Treasuries held in custody, we noted something troubling: the number had continued to drop sharply, declining by another $14 billion in one week, and pushing the total amount of custodial paper to $2.788 trillion, the lowest since 2012.

One month later, we refresh this chart and find that in last week's update, there is finally some good news: foreign central banks finally bought some US paper held in the Fed's custody account, which following months of liquidation, rose over the past two weeks by $23 billion, the biggest two-week advance since November of 2016, pushing the total amount of custodial paper to $2.816 trillion, the highest since early October. Been struggling just to function properly for some time.

In all cases, it may suggest concerns about a spike in future debt issuance by the US, especially now under the pro-fiscal stimulus Trump administration. The answer, at least until August, was private demand, in other words just like in the stock market the retail investor is the final bagholder, so when it comes to US Treasuries, "private investors" both foreign and domestic are soaking up hundreds of billions in central bank holdings. Basically, financial products that promise to gladly pay you Tuesday for a hamburger today.