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https://www.blogger.com/comment.g?blogID=22903415&postID=6143922695576488476

Velobwoy said... China: No More Fooling Around

Chris Martenson recently uncovered that it was the Fed, NOT China who bought most of the 7 years Treasury Notes issued last week. As you probably know, last week the Treasury issued a record $260 billion in debt. Of this, $109 billion were Treasury Notes: shorter-term debt. The issues were as follows:
2 year: $42 billion (Tuesday)5 year: $39 billion (Wednesday)7 year: $28 billion (Thursday)The two year and five year issues were weak and bordered on failure. In fact, if it weren’t for the fact that Primary Dealers (one of the parties involved in buying Treasuries) are REQUIRED to buy, the 5’s would have actually failed (meaning not all of them would have been bought).
Turns out the Fed bought $6 billion 5's and $6 billion 7's. And they only waited a week to buy them from the Primary Dealers. So at least SOME of the auction was in fact monetized by the Fed, which asked the Primary Dealers to buy the Treasuries and sit on them for a week. Forget the fact that this is sneaky way of trying to hide the fact China and other countries don’t want our debt anymore… this is MORE of the Quantitatie Easing that Bernanke said he was going to phase out. The story was broken to the public by Brian Benton and Financial Sense University.
Folks, China is through screwing around. They’ve made it clear that they don’t HAVE to buy our debt and are quite comfortable putting their money to use elsewhere. The fact that the Fed is now buying Debt from the Treasury in this sneaky fashion makes it clear that without the Fed, we might have seen failed auctions.
Remember also that a failed Treasury auction was one of the harbingers of imminent economic collapse from last month's list.