Treasury Sells $29 Billion In Bonds, Bringing Total Settled US Debt To 14.311 Trillion, More Than The Debt Ceiling

Submitted by Tyler Durden on 03/30/2011 13:25

First, the irrelevant news: Today's $29 billion 7 Year auction just closed at a yield of 2.895%, the highest since April 2010, just the time when QE1 was ending and everyone was certain there would be no follow through monetization. The Bid To Cover was 2.79, weaker compared to recent auctions, and 2 bps wider of the When Issued, implying the auction was not all that hot. Directs took down 8.76%, in line with the last year average, Indirects accounts for 49.41%, or the lowest foreign take down since November 2010, while PDs bought 41.83% of the auction. Altogether a weak auction. And now the relevant news: the most recently disclosed total debt was 14,211,567,662,931.23 as of March 28. This excludes the settlement of all of this week's auctions which amount to $35 + $35 + $29 billion (including today) or $99 billion. Adding the two amounts to $14,310,567,662,931.23. As a reminder the debt ceiling is $14,294,000,000,000.00. In other words, the total US debt just passed the debt limit - break out the Champagne! Now bear with us for a second: the most recently disclosued total debt was 14,211,567,662,931.23 as of March 28. This excludes the settlement of all of this week's auctions which amount to $35 + $35 + $29 billion (including today) or $99 billion. Adding the two amounts to $14,310,567,662,931.23. As a reminder the debt ceiling is $14,294,000,000,000.00. In other words, the total US debt just passed the debt limit - break out the Champagne! 

 

 

 

Hoenig Says Lower And Middle Classes Pay "Dear Price" For Fed Mistakes, Accuses Fed Of Commodity Price Inflation

Submitted by Tyler Durden on 03/30/2011 13:50 -0400
Hoenig is back, and a few months before his retirement, has released what appears a valedictory exercise in venomous truthiness: "Today, my view has not changed. The FOMC should gradually allow its $3 trillion balance sheet to shrink toward its pre-crisis level of $1 trillion. It should move the U.S. federal funds rate off of zero and toward 1 percent within a fairly short period of time. Then, after evaluating the effects of those actions, it should be prepared to move the funds rate further toward a level that could be reasonably judged as closer to normal and sustainable." At long last, someone admits the obvious: "While some of the increase may reflect global supply and demand conditions, at least some of the increase is driven by highly accommodative monetary policies in the United States and other economies." For those terrified by the ravages of deflation: "I tracked the average growth of money and the price levels in the United States from the 19th century to the present (Chart 3). It should surprise no one that there is a striking parallel between the long-run growth of money and the growth in the price-level index. From the end of World War II alone, the price index has increased by a factor of ten. With such a track record, it is hard to accept that deflation should be the world’s dominant concern." And lastly, for those who refuse to see Bernanke's policies as genocidal (metaphorically speaking but quite literally in MENA) to the lower (and increasingly) middle classes: "Central bankers must look to the long run. If current policy remains in place, we almost certainly will stimulate the growth of asset values and inflation. This may temporarily increase GDP and employment, but in the long run, we risk instability, damaging inflation and lost jobs, which is a dear price for middle and lower income citizens to pay."

Third Largest Producer Of Silver Says Production Is Now "Totally Paralyzed" Following Week-Long Strike

Submitted by Tyler Durden on 03/30/2011 11:54 -0400

In news that should move the precious metals market, we learn that the world's third largest producer of silver (as well as zinc and lead) has announced its production is now totally paralyzed. From Reuters: "A week-old strike at Bolivia's San Cristobal mine has totally paralyzed production and exports of silver, zinc and lead, a union leader said on Wednesday. San Cristobal is the world's third-largest producer of silver and the sixth-largest producer of zinc, according to Japan's Sumitomo Corp, which owns the mine." For those who recall basic central planning economics this means that silver should plunge immediately, and should react even more adversely on news that crude supplies in the US are surging. After all, oil supply demand is far more critical to silver price discovery than the actual supply of a metal that unlike gold, is used in various industrial and peacebringing applications (see Operation Odyssey Dawn).

Third Government Set To Fall In A Week: Kuwait Cabinet Expected To Resign On Thursday "Over Questioning"

Submitted by Tyler Durden on 03/30/2011 12:22 -0400

Following the fall of the Portuguese and Canadian governments (and don't get us started on Belgium), here comes the latest entrant to the anarchy club. Kuwait's cabinet is expected to resign on Thursday after lawmakers asked to question three ministers, parliamentary sources said on Wednesday. More from Reuters: "The sources said that the cabinet was set to submit its resignation after lawmakers asked to question three ministers who are ruling family members, including the oil exporter's energy minister, who is also the information minister." After all what better way to avoid answering questions in a bona fide "democracy" than to take down the entire government. But this too is bullish: "Ministerial resignations are frequent in Kuwait, which has the most outspoken parliament in the Gulf Arab region." In other words it was priced on. And furthermore, with a globalized corporatocracy long in charge of the world, receiving its lifeblood of endless money and cheap credit, who needs governments anyway.

Ag Commodities and The Coming Inflation

posted by Turd Ferguson at Along The Watchtower - 12 hours ago

Longtime readers will recall that we've had several conversations here regarding the impact that the Fed's quantitative easing policy is having on the costs of everyday food items. Soaring prices of agricu...

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