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Forum Post: Treasury Scarcity to Grow as Fed Buys 90% of New Bonds

Posted 5 years ago on Dec. 5, 2012, 6:33 p.m. EST by john23 (-272)
This content is user submitted and not an official statement

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.

Even after U.S. public borrowings outstanding grew from less than $9 trillion in 2007 as the U.S. raised cash to pay for spending programs designed to pull the economy out of the worst financial crisis since the Great Depression, rising demand coupled with a drop in net supply means bonds will be scarce.

“The shrinking amount of bonds in the market is lowering rates and not just benefiting the Treasury, but providing lower rates for private-sector decision-makers as well,” Zach Pandl, a senior interest-rate strategist in Minneapolis at Columbia Management Investment Advisers LLC, which oversees $340 billion, said in a Nov. 30 telephone interview. “The Fed is not creating this scarcity to help out the Treasury, it’s primarily to get the economy going.”





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[-] 1 points by Shule (2638) 5 years ago

Yeh, but when they do this, in that they still have to pay their bills, they are borrowing money out of social security (getting that to go broke), and then printing up extra money to cover the short falls (thus creating inflation.) Meanwhile, big player investors are taking their money overseas to places like south east Asia where the returns are higher ( and the U.S. gets short on real cash.)

The Fed is really doing it for survival. They need to keep the interest payments on government debt under control.

[-] 0 points by Coyote88 (-24) 5 years ago

This is what the majority of Americans want. In the end it won't matter. Debt is an illusion.

[-] -2 points by hchc (3297) from Tampa, FL 5 years ago

JP Morgan and WellsFArgo posted record profits during the 3rd quarter.

Record profits?

[-] -2 points by RedDragon (-161) 5 years ago

This is probably one of the most significant postings of the last week and yet it is unlikely any here will respond.

[-] 3 points by shoozTroll (17632) 5 years ago

I think we should TAX the holy shit out of all the fucking oil corporation executives and their investors, both on Wallstreet and elsewhere, to pay for their fucking OIL wars !.

Make 'em pay us every God damned dime back and then some. with the extra going to the war wounded and the families that lost loved ones entirely.

[-] -1 points by john23 (-272) 5 years ago

Do you use oil shooz? Do you drive a car? Or have anything made of plastic in your home? Use fertilizer? Own shoes?

[-] 2 points by DKAtoday (33486) from Coon Rapids, MN 5 years ago


[-] 0 points by john23 (-272) 5 years ago


[-] 1 points by shoozTroll (17632) 5 years ago

Change the subject much?

Nobody has to die over it.

Starting wars, just to profiteer them is pretty fucked, don't ya think?

[-] -1 points by john23 (-272) 5 years ago

You didn't answer my simple question. One thing i can't stand in this country is people bitching about oil companies as they drive around in their cars and use plastic in every aspect of their lives. If people really cared about it that much - they'd boycott it...instead of bitching about it.

The oil companies don't start wars - the wars are started by the government to acquire more reserves around the world because people like you in this country use oil everyday and demand that prices remain cheap....it's political suicide to allow oil prices to rise and not attempt to do anything about it because the people are addicted to cheap oil - even under an obama admin - the supposed "environmental" party. People like you whine about the ridiculous profits of oil companies, yet use their products every day.

Yet what would rising oil prices do? Force people to look for alternatives which would force companies to invest more into alternative research which would speed the transition off of oil. So democrats should be all for high oil prices. But they're not - because people like you are addicted to it and you demand it of your representatives to keep prices cheap.

It's so counter-intuitive in this country - you poll people on the question "do you want cheap oil prices"..10/10 would say yes. Then you go ask them if they want to raise taxes on oil companies - i'd say 9/10 would say yes. Anyone else see the ridiculous logic here??????

Oil companies don't make ridiculous profits like everyone thinks. When you look at profits you have to look at it as income/dollar of sales....that way you can take a local mom and pop shop and compare it to a massive oil company. But what do economically challenged people do? They look at gross profits - the entire world utilizes oil - so yes, their gross profits will look large compared to a smaller industry - but it isn't a true representation of income - because it hasn't adjusted for industry size. When you look at oil company profits as a net income per dollar of sales....you will see what i mean..hell "apparel and leather products" makes more money than oil companies.

This is coming from a guy who got an engineering degree in green design....i'm not pro oil.

[-] 0 points by shoozTroll (17632) 5 years ago

So then john, how many must die to secure your high oil profits?

Just how many?

Please stop your fucking BITCHING about the deficit, as of now YOU own it and all the death and destruction.

[-] -1 points by john23 (-272) 5 years ago

Ask the government how many people must die to secure oil reserves to give you cheap oil that you demand every day. Oil companies don't start wars - your government does.

I'm in favor of letting oil prices rise which would force the country to alternative energies - i'm not the problem - it's the 99% of americans that want cheap oil that are the problem.

When did i btich about the deficit - and why do i own it and all the death and destruction?????

[-] 1 points by VQkag2 (16478) 5 years ago

We all own it. i do not drive a car but petroleum is in many other products I use.

Oil co's benefit so much from our military protection of their product but do not pay for it.

That military cost should be reflected in the price. And if it did the price would be so high we WOULD be installing solar panels everywhere.

[-] -1 points by john23 (-272) 5 years ago

"And if it did the price would be so high we WOULD be installing solar panels everywhere."

I agree - so let prices rise....but they won't...because just about every american wants cheap oil.....they voice this every time gas prices rise. Even the dems - the so called environmentalists won't let oil prices rise without attempting to artificially drop them again - like Obama releasing stored oil reserves to dampen price increases. Let the prices rise - it would force us into alternative energies.

Another way to correct the problem is to make the american people pay for war directly - force higher taxes instead of printing money to fund he wars - this way americans are sacrificing directly (instead of indirectly through inflation which they don't understand) in a fraction of the way that the men and women are sacrificing dying overseas for these ridiculous oil wars. Maybe if amreicans had some skin in the game for these wars they'd pay a little more attention to what is actually going on.

[-] 2 points by VQkag2 (16478) 5 years ago

I can't argue. being re elected is so important even greentech supporters must give lip service at least, & votes at most, but still oil goes up, and greentech will go down.

Eventually the tide will turn, enough pols will recognize the economic benefits of greentech, and subs will betransfered from fossil fuel/nuclear corps to greentech.

It's inevitable, but we must continue the pressure.

[-] -1 points by john23 (-272) 5 years ago

It is inevitable - no doubt about it. A limited resource will not last forever. With guaranteed risiing prices from increased scarcity in the years to come it will force companies in the alternative direction.

[-] 2 points by VQkag2 (16478) 5 years ago

Jim Demint leaving the Senate! Breaking news!

He's anti greentech! Hisreplacement will be I assume but will not have his influence.

[-] 0 points by shoozTroll (17632) 5 years ago

He's going over to the Heritage Foundation.

I knew he was a neolibe(R)tarian.

[-] 1 points by VQkag2 (16478) 5 years ago

We will see.

Certainly the move SHOULD be spun as I have described in any event.


[-] 1 points by VQkag2 (16478) 5 years ago

You're right, heritage is a major force/player against progressive change.

Maybe stronger with Demint.

But Tea party influence is weaker in the Senate, and the Senate is more powerful than Heritage Foundation.

So I think this represents a plus in our column.

But the change is small, the battle continues.

[-] 1 points by shoozTroll (17632) 5 years ago

I hope you're correct.......................:)

I am glad to see Demint out of the limelight.

[-] 1 points by VQkag2 (16478) 5 years ago

Good fit for him. But his replacement although certainly a repub, will not have his influence. So I think it amounts to a hit on extremist tea party faction.

[-] 2 points by shoozTroll (17632) 5 years ago

Heritage is a powerful propaganda machine, don't doubt that.

Demint's a psychopath. That's not a good combination.

The teabagge(R)s are just regrouping........beware.

[-] 0 points by shoozTroll (17632) 5 years ago

Cheap? Did you really say cheap?

You are indeed the problem. You can not see reality as it is.

Your friend Cheney even admitted we went to war to secure oil profits.

Face a little reality, if you would and bow down to your noelibe(R)tarian masters.

[-] -1 points by john23 (-272) 5 years ago

I've been against every war we've fought for oil and resources....from Iraq to Libya.

Yes, cheap...that is why everyone is still using it.

You didn't answer my question:

"When did i btich about the deficit - and why do i own it and all the death and destruction?????"

Cheney is not my friend - quit assuming i'm a republican who supports bush/cheney/o'reilly/hannity/limb etc etc etc....i'm not. Cheney is also nowhere close to a libertarian - he's a neocon....you gotta get your defiintions of the reds right.

[-] 0 points by shoozTroll (17632) 5 years ago

Cheney is pure100% neolibe(R)tarian. The Kochs love the guy.

I didn't assume anything about you. I go by what you post.

Let's see, I'll bet you're another one of those deluded folks that claims he is socially liberal and fiscally conservative?

Code talk for libe(R)tarian.

[-] 0 points by john23 (-272) 5 years ago

Cheney is big government all the way...fiscally conservative my ass...how many wars did he personally bring to the table while in office? They're fiscally conservative with stuff they don't agree with - but completely drop the ball when it's stuff they do agree with (military etc.). He's a manipulating neocon to the core.

[-] 0 points by shoozTroll (17632) 5 years ago

Hmmmmmm, further comprehension issues.

I was talking about you......................................:)

I still stand by my remarks about Cheney and the Kochs.

[-] 0 points by john23 (-272) 5 years ago

Yeah, i'm fiscally conservative and socially liberal.

Whats wrong with that? Balancing a budget? It's the only sustainable path on a long-term basis. Common sense.

[-] 0 points by shoozTroll (17632) 5 years ago

It's the bullshit libe(R)tarianism of it all.

It's why you are so confused and show comprehension issues.

[-] -1 points by john23 (-272) 5 years ago

How about some substance - what about balancing a budget doesn't make sense?

Maybe you're mathematically challenged?

[-] -2 points by lignite (-303) 5 years ago

Some of us have a legit bitch about the deficit, especially the over 6 trillion that obummer rang up. Folks like you that live off the system do not care because us working folks provide for trash like you

[-] 0 points by shoozTroll (17632) 5 years ago

Well then, I think you should get out there and put your life on the line for one your sacred and holy oil corporations.

That's who we've rung up the deficit for. Oil wars. So do your your duty for the Kochs fortune and get out there.

[-] -2 points by lignite (-303) 5 years ago

No we need to drill more here in the US. If it was not for the crying coming from the (going make in time) from the loser libs, then we would be drilling a lot more right now

[-] 2 points by VQkag2 (16478) 5 years ago

We are drilling more here! More than any time in history! Got ya covered.

Now we have to stop burning fossil fuel as much as possible, for the sake of our childrens environment & to stop importing oil from the middleeast, thereby eliminating the need for all the military expense protecting opec countries, & related shipping lanes.

[-] -3 points by lignite (-303) 5 years ago

We are not drilling enough and we need to re-open more of the coal mines that the incompetent leader shut down. Fossil fuels are the way to go now and into the future

[-] 2 points by VQkag2 (16478) 5 years ago

Coal is the dirtiest fossil fuel, but we are producing coal just fine.


If we have declined at all it is simply because our bug customers (China, etc) are in the midst of economic downturn (thanks Bush/corp oligarchs) or implementing cleaner greentech (thanks Gore/progressive Environmentalists)

Get it?

[+] -4 points by lignite (-303) 5 years ago

(thanks Gore/progressive Environmentalists)========== For putting us economically deeper into the cesspool

[-] 1 points by VQkag2 (16478) 5 years ago

Here is the corrupt oil corps in action.


Whatta ya' think of that?

[-] 1 points by VQkag2 (16478) 5 years ago

Greentech is the future economy. It has only grown and WILL only grow.

Deny it at your own peril.

[-] 1 points by VQkag2 (16478) 5 years ago

Greentech is the future economy. Deny it at your own peril.

[-] -1 points by lignite (-303) 5 years ago

greentech is going in reverse and only costing us taxpayers a losing deal

[-] 0 points by shoozTroll (17632) 5 years ago

Records aren't enough to satisfy you, yet in your ignorance you ignore what I said?

You have NO legitimate bitch, the deficit was rung up for the oil wars.

TAX the shit out those that are profiteering from it and they will go away.

[-] -3 points by lignite (-303) 5 years ago

The deficit was rung up by an incompetent leader. America does have rely on Foreign oil, since we have plenty of it here. So we need to get drilling

[-] 3 points by inclusionman (7064) 5 years ago

You're a fuckin moron.

[+] -4 points by lignite (-303) 5 years ago

And how is that new obama phone working out for you loser???

[-] 3 points by inclusionman (7064) 5 years ago


[-] 3 points by VQkag2 (16478) 5 years ago

Bush & his 1% corp crony oligarchs crashed the world economy and created the deficit/debt problems we face.


[+] -4 points by lignite (-303) 5 years ago

Wrong. The economy was going fairly good until the obama admin took over. Then all hell broke loose, millions lost their jobs, our credit rating got trashed and the village idiot ran up the deficit more than any other Pres in history

[-] 2 points by VQkag2 (16478) 5 years ago

The economy went into recession starting in 2007. Bush created unemployment rate of 10%, When Pres took the oath Bush was sitting on job losses of 750k per month. Ignorant fool!

You're dreamin. or just lying. I think the latter.

[-] 0 points by shoozTroll (17632) 5 years ago

Sorry NO. You are certainly suffering from delusions.

Too much of this?


You see, instead of listing to what someone else said about it, I was living in the middle of it.

Within 6 months of Bush taking office overtime was being cut, by the time he entered his second term, permanent layoffs had begun and lines were on short work week.

Make NO mistake, this a GOP powered recession and it still is.

[-] -2 points by lignite (-303) 5 years ago

Wait until obama starts his new term and what do you think he will say this time??? "I inherited another mess" that clown is a loser

[-] 0 points by shoozTroll (17632) 5 years ago

NO......the economy began crashing within 6 months of Bush taking office, then he kicked the dog on the way out the door, with the Wolrds economy crashing all around him.

Why do you think they won't let him speak in public these days?

[-] -3 points by lignite (-303) 5 years ago

Jobs were plentiful and gas was at 1.80 at the closing term of the Bush admin. When the village idiot took over then the Country went deep into the ditch and remains there today

[-] 0 points by shoozTroll (17632) 5 years ago

No............it's been rung up by oil wars, incited under a GOP administration.

Denial on your part won't change that.

Tax the shit out of the profiteers.

This may be your problem.


You have gladly and willingly joined the ranks of the insane.

Perhaps with an unhealthy dose of FLAKYNESS.


[-] -2 points by RedDragon (-161) 5 years ago

hahaha... wait a minute... first they tax us, then they use the tax dollars to take our children, and not to secure oil but to secure our INTEREST in oil; they rewrite a foreign constitution to regain oil leases which they then hand to the british and the f*cking chinese, and they enrich their friends with Halliburton and Blackwell.

I want oil; I want a lot of oil. And I want it "free."

[-] 1 points by shoozTroll (17632) 5 years ago

Are you the puppet, or is john?

I didn't say tax your precious corporation.

Cheney, the evil one himself, admitted it was all about the oil, so just this once, try and keep up.

[-] 0 points by RedDragon (-161) 5 years ago

An interest in oil... as far as I know all of the oil leases have gone to other foreign investors; Exxon Mobile, I believe, was ultimately banned. And I get the impression these are all just maintenance contracts, not direct production contracts. The Iraqis need foreign investment, not just in oil but also in infrastructure. The region is still unstable, investment is risky, and since we have gained no piece of the oil fields, only our "interest" has been boosted, which now lies in overall increased production.

I understand the anger, to this day unsatiated, but I have never supported this protracted political maneuver by force in Iraq. And I consider Cheney as one of my to-the-death enemies.

[-] 0 points by shoozTroll (17632) 5 years ago

Still having issues with that keeping up thing I see.

Still not addressing what I actually proposed.

I actually read what you said, although you've proposed NOTHING, so I will suggest that all the nations of the west act in concert on my proposal..

[-] 0 points by RedDragon (-161) 5 years ago

I support your statements on big oil. Absolutely. I would add to that a mandate to sell gasoline and fuel oil at affordable prices.

[-] 1 points by shoozTroll (17632) 5 years ago

The impression I get from the bulk of your posting here, is that if Obama created such a mandate, you would be screaming like a stuck pig about how he is controlling the precious "invisible hand".

Prove me wrong.

Besides, don't you have some trees to chop out of spite?

[-] -2 points by RedDragon (-161) 5 years ago

Obama and I are radically opposed on the issue of energy; he wants "necessarily" higher prices, I want inexpensive heat, light, and power. I'm not at all in favor of reprimitivism and suffering for the poor while the rich live so lavishly.

PS: I just bought a new chain saw: "TIMBERRRR!"

[-] 0 points by shoozTroll (17632) 5 years ago


Do you have that exact quote?

Your could have spent that money on heating oil though, so you're still cutting off your nose to spite your face and giving extra money to the oil execs that cause you the pain in the first place.

[-] 0 points by RedDragon (-161) 5 years ago

Get real... I can buy a dozen of these name brand, made in china saws, for the price of just one tank of fuel oil.

[-] 1 points by shoozTroll (17632) 5 years ago

Then you best get busy cutting your nose to spite your face.

Or as you like to say tim.................burrrrrrrrrrrrrr.

Martha, why's it so smoky in here?

[-] -1 points by RedDragon (-161) 5 years ago

We didn't start the fire... it was always burning since the world's been turning.

[-] 0 points by shoozTroll (17632) 5 years ago

Yeah, no body ever fesses up.

Quoting Billy without due, is pretty lame, especially for a "self identified" "conse(R)vative".

[-] -1 points by john23 (-272) 5 years ago

I don't think most people understand what this even means.

[-] -1 points by RedDragon (-161) 5 years ago

I suspect you're right.