The awful performances of the longer term Treasury auctions contained within them a sign that foreign central banks are beginning to reverse a normal intermediate cycle upswing in their purchases of Treasuries and GSEs. The long term trend of FCB purchases continues to be down. The Treasury has expressed confidence that the domestic banking system and other investors will pick up the slack. They’re smoking dope. The banks have shown little inclination to pick up anywhere near the amount of supply which they would need to in order to keep rates from rising. The only way to do it, in my view, is via waves of fear driven selling in the stock market that sends funds cascading toward Treasuries. Even that might not work. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.