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Fed Keeps Monetizing the Debt – 16-Day Bill Treasury Auction Results

This is a syndicated repost courtesy of Treasury Auction Results. To view original, click here. Reposted with permission.

Yes, the Fed keeps monetizing the debt. Just look at today’s Treasury Cash Management Bill auction.

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The Treasury said that it was way oversubscribed. No shit, Sherlock! Since Friday the Fed has pumped $18.6 billion in permanent money into Primary Dealer accounts via POMO outright purchases of Treasuries. Then yesterday and today it rolled about $100 billion in TOMO repos to make sure that money stays in the banking system.

Bottom line: The Fed has been monetizing approximately 60% of the US Government’s budget defecation. That means that the dealers, banks, investors, and the rest of the world need to absorb only 40%. That ratio seems to be enough for the central bank to win the battle to keep the stock and bond market asset bubbles inflated.

Fed Monetizing the Debt

Whether it’s a strategy that will win the “war” remains to be seen.

What a disgusting mess.

Term and Type: 16-Day Bill
CMB: Yes
High Rate: 1.540%
Investment Rate: 1.567%
Price: $99.931556
Allotted at High: 52.15%
Total Tendered: $54,450,259,000
Total Accepted: $15,000,034,000
Auction Date: 11/20/2019
Issue Date: 11/26/2019
Maturity Date: 12/12/2019
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Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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