U.S. Treasury Debt Auctions Bombing, China Heading for the Hills … Higher Interest Rates Dead Ahead!

Interest-Rates / US Interest Rates Feb 19, 2010 - 10:15 AM
By: Mike_Larson

You can’t count on Washington to pro actively warn you about major economic and market problems …

* We warned you that tech stocks would crash well before they did.
* We told you the housing market would implode well before it did.

And as you know, for months we’ve been ratcheting up our warnings about the government bond market.

Now, the very latest data suggests the day of reckoning is fast approaching. This is no longer some theoretical, potential future event. It’s a crisis that could strike with deadly force at virtually any time. You simply must consider taking action to protect yourself and profit before it’s too late!

Let’s get right to the numbers …

10-Year, 30-Year Auctions Stink Up the Joint!

Every few weeks, Uncle Sam floods the bond market with a deluge of new long-term notes and bonds. The government has no choice! It’s running massive budget deficits, with tax revenues failing to cover expenses, and it has to borrow to make up the difference.

Historically, the Treasury Department hasn’t had any trouble finding buyers for its bonds. It could always count on loyal foreign and domestic bidders to show up at its debt auctions.
Treasury is having trouble finding buyers for its bonds.
Treasury is having trouble finding buyers for its bonds.

But times are a-changing!

Just a few days ago, Treasury tried to auction off $25 billion in 10-year notes and $16 billion in 30-year bonds. Investors failed to step up to the plate in either auction — a bright red warning sign for bonds if I’ve ever seen one!

With the 10-year auction, only 33.2 percent of the notes sold went to so-called “indirect bidders,â€