Treasury Sale See’s Lowest Demand Since 2009
10Yr Benchmark going vertical again…
Treasury prices extended a drop Wednesday after a disappointing 7-year note auction showed the weakest demand for such a sale since 2009.
The benchmark 10-year note 10_YEAR +2.06% yield, which rises as prices fall, rose 5.5 basis points on the day to 2.766%. The 30-year bond 30_YEAR +0.92% yield rose 3 basis points to 3.833% and the 5-year note 5_YEAR +5.70% yield rose 4.5 basis points to 1.390%.
The Treasury Department sold $29 billion of 7-year notes 7_YEAR +2.99% at a yield of 2.106%, higher than where the broader market was trading at the time. The ratio of bidders to the amount of debt sold was 2.36 times, below the average of 2.57 times in the last six sales, and the lowest ratio since May 2009, according to Stone & McCarthy Research Associates.
Indirect bidders, which can include foreign investors, bought 34.1% of the sale, compared to 43.5% in recent auctions. Direct bidders, which can include domestic money managers, bought another 16.1%, compared to an average of 19.5%…
Yield on 10Yr Benchmark
Take cover! Bond market ‘hell’ could be on the way
If fixed-income investors were under any impression that 2014 could mark an end to the turbulence experienced this year, they should think again – with some analysts predicting volatile conditions on both sides of the Atlantic.
“It’s a dangerous game trying to time your exit,” Johan Jooste, head of the London investment office at private banking group Julius Baer told CNBC Thursday. “The level of yields and the direction of yields both argue against really having strong fixed income exposure.”
The interest rate on the U.S. benchmark 10-year Treasury started 2013 at 1.8 percent, following an open-ended commitment by the Federal Reserve to continue buying bonds, which suppressed yields close to record-low rates.
Harbinger: 23 countries begin setting up swap lines to bypass dollar
For several years, financial analysts, primarily those outside the mainstream of academia, have been warning that any day could be the black swan event that collapses the dollar, and ends U.S. hegemony as caretaker of the world’s reserve currency. That day has finally arrived as on Nov. 18, a former head trader for a major financial institution issued a harbinger and stated that 23 countries, and 60% of the world’s GDP, are right now setting up new swap lines which bypass the dollar, SWIFT, and the BIS, and will usher in a new global currency system which will kill the dollar.
The thoughts that are put into the minds of men that are aware of what is occurring on trading floors all over the world is when? When is also the question that I get asked about quite often by thousands of people. So what is the “when”? The “when” is what is the sure sign that this fraudulent sham that we call an economy is over? Folks the biggest sign is when those that trade in the dollar to acquire goods, no longer want the worthless paper because of US “bully” policies or they have totally lost faith in the US as a responsible steward of it’s currency and economy. That day has arrived.
All over the world economies that have not totally shot themselves in the foot by gambling in the Anglo-American casino are now moving to set up various currency exchanges by passing the dollar. –Rogue Money via Steve Quayle Q Alerts
China Announces That It Is Going To Stop Stockpiling U.S. Dollars
The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.
“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes
China’s Gold Rush Continues, Imports Another 131 Tonnes In October
It was a month ago when we discussed the September gold import statistics from Hong Kong to China. Net imports (after deducting flows from China into Hong Kong) were 109.4 metric tons in September and 110.2 tons in August. In our article China Imports 0.7% Less Gold Than August, Bloombergs Says Slowdown we showed that Bloomberg reported a “slowdown” for September. We showed the real facts: “since the year 2000, only two months saw significantly higher imports than September, i.e. March and July of this year. August and September (with a minor difference of 0.7%) were the third best months ever when it comes to gold imports to China through Hong Kong.”
The latest statistics show that China imported another 131 tonnes of physical gold in October through Hong Kong.
The most disruptive monetary technology… in 6,000 years
…Many who fear central banks are printing their currencies into oblivion are turning to Bitcoins… but with no controlling agency, the currency’s exchange rate is prone to violent swings. One Bitcoin now trades for $813.50. Three weeks ago, it was under $300.
Bitcoins don’t fit the classic model of money. They’re not a replacement for gold… But anything that keeps central bankers up at night has our admiration. You can see the current Bitcoin exchange rate here.