Thread: What happens if you have a bond sale and nobody comes?

What happens if you have a bond sale and nobody comes? I guess you buy the bonds yourself.

A Principle for Peter in the 21st Century

By Dr. Robert R. Owens
Saturday, November 13, 2010

The world is lining up to not buy our debt so we are buying it ourselves in a move we call by the innocuous acronym QE2, which is short for Quantitative Easing two.

More traditional, or verbally honest, economists are calling this what it is: monetizing our debt. This is a move which has our creditors heading for the doors and our enemies smiling as poor old Uncle Sugar stands with his pockets turned inside out, a bewildered look on his face as he wonders, “Where did all flowers go?â€

China, others bought more Treasuries in September

By Jeannine Aversa, AP Economics Writer

WASHINGTON — China, the biggest buyer of U.S. Treasury securities, boosted its holdings for a third straight month, the Treasury Department reported Tuesday.

China's holdings of Treasury debt rose to $883.5 billion in September, Treasury said. That's a 1.7% increase from August. For much of this year, China has been increasing its holdings of Treasury debt.

The report shows that China and other countries still have a robust appetite for Treasury debt even as the U.S. government is running annual budget deficits topping $1 trillion.

Overall, foreign governments increased their purchases of Treasury securities by $39.5 billion in September, a record. A sustained drop in foreign demand for Treasury debt could lead to higher U.S. interest rates, slowing the economy.

Japan, second-largest holder, expanded its portfolio of Treasury debt to $865 billion, a 3.4% increase from August. Britain, third-biggest holder, boosted its stake to $459.1 billion, a 2.1% increase.

Total holdings of Treasury securities by all countries rose to $4.2 trillion in September, an increase of 1.3% from August. Of that total, $2.8 trillion is held by foreign governments and central banks.

The report also showed that foreign governments and central banks cut their holdings of Fannie Mae and Freddie Mac bonds for the third straight month. Those holdings were cut by a record $31.4 billion in September. The previous record monthly reduction was $16.5 billion in October 2008, the height of the U.S. financial crisis and one month after the U.S. government's takeover of the two mortgage giants.

http://www.usatoday.com/money/economy/2 ... eign_N.htm