Now the printing press is being warmed up ...

[gonegolfin]

The Treasury is using this new program to raise cash for the recently announced Fed initiatives. Originally I thought that the Fed may be buying these treasuries in an attempt to rebuild their treasury portfolio (which has been reduced to less than $500 billion due to its TSLF lending facility and the sterilization of various cash lending programs). The Treasury would then make the cash loans. But it is being announced as the Treasury selling the treasuries (more government debt) and providing the proceeds to the Fed. This will be interesting to watch as it is explained more fully.

FT Alphaville » Blog Archive » The Fed’s run out of money

And we have a flight to safety with Gold up over $88 (11.4%) and Silver up about $1.45 (13.8%).

Brian

 

[gonegolfin]

The Treasury sold $40 billion of 35-day bills today (at 0.30% yield) for the Fed and will sell $60 billion worth of bills in two auctions tomorrow, for a two-day total of $100 billion.

The Treasury is using this new program to raise cash for the recently announced Fed initiatives. Originally I thought that the Fed may be buying these treasuries in an attempt to rebuild their treasury portfolio (which has been reduced to less than $500 billion due to its TSLF lending facility and the sterilization of various cash lending programs). The Treasury would then make the cash loans. But it is being announced as the Treasury selling the treasuries (more government debt) and providing the proceeds to the Fed. This will be interesting to watch as it is explained more fully.

FT Alphaville » Blog Archive » The Fed’s run out of money

And we have a flight to safety with Gold up over $88 (11.4%) and Silver up about $1.45 (13.8%).

Brian

 

[dilloduck]

The Treasury sold $40 billion of 35-day bills today (at 0.30% yield) for the Fed and will sell $60 billion worth of bills in two auctions tomorrow, for a two-day total of $100 billion.

ty Treasury and Fed---I wonder who is going to buy our debt ?

 

[CA95380]

ty Treasury and Fed---I wonder who is going to buy our debt ?

You are.

 

[dilloduck]

You are.

okie dokie---I'm going to have to through my loose change drawer tho...it could take a couple hours.

 

[CA95380]

okie dokie---I'm going to have to through my loose change drawer tho...it could take a couple hours.

Nah. Just call up your celebrity friends and let them raise money for you.

 

[dilloduck]

Nah. Just call up your celebrity friends and let them raise money for you.

naaaa-- i think they are all busy at a cow chip toss.

 

[Care4all]

ty Treasury and Fed---I wonder who is going to buy our debt ?

china, they own us now....

and we are now a fascist gvt, and own our banks, our insurance companies, our airlines if we bail them and our automakers if the fed bails them?

i never realized the treasury and fed had so much power and could make these kind of moves without congress?

ARE they making these moves without congress?

heard on lou dobbs that with all the bailouts and the proposed ones to come, this year alone, it puts an $800 billion dollar tax burden on to us....if these bailouts fail....?

can someone please explain this to me at a kindergarten level, i truely don't understand any of it???

care

 

[dilloduck]

china

No shit, sherlock !

 

[gonegolfin]

china, they own us now....

and we are now a fascist gvt, and own our banks, our insurance companies, our airlines if we bail them and our automakers if the fed bails them?

i never realized the treasury and fed had so much power and could make these kind of moves without congress?

ARE they making these moves without congress?

heard on lou dobbs that with all the bailouts and the proposed ones to come, this year alone, it puts an $800 billion dollar tax burden on to us....if these bailouts fail....?

can someone please explain this to me at a kindergarten level, i truely don't understand any of it???

care

I am not jumping on you ... but it is amazing to me how clueless most everyone is with respect to our monetary system and the power and role of our Central Bank. And the fact that Congress is in bed with all of this.

A good way to start understanding is to read this ... [ame=http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212]Amazon.com: The Creature from Jekyll Island : A Second Look at the Federal Reserve: G. Edward Griffin: Books[/ame]. It might sound dry, but it is not. It is actually a fascinating book on world history from a monetary perspective. I made my wife read it and she absolutely loved it.

Brian

 

[editec]

The Treasury is using this new program to raise cash for the recently announced Fed initiatives. Originally I thought that the Fed may be buying these treasuries in an attempt to rebuild their treasury portfolio (which has been reduced to less than $500 billion due to its TSLF lending facility and the sterilization of various cash lending programs). The Treasury would then make the cash loans. But it is being announced as the Treasury selling the treasuries (more government debt) and providing the proceeds to the Fed. This will be interesting to watch as it is explained more fully.

FT Alphaville » Blog Archive » The Fed’s run out of money

And we have a flight to safety with Gold up over $88 (11.4%) and Silver up about $1.45 (13.8%).

Well one good thing...plenty of people are in the market for Tbills.

People are panicing, just trying to find anyplace to preserve capital.

I heard T-bills yield was .1% today and people were snapping them up?!

That is one spooked investment community, if those reports are right, man.

 

[gonegolfin]

Well one good thing...plenty of people are in the market for Tbills.

People are panicing, just trying to find anyplace to preserve capital.

I heard T-bills yield was .1% today and people were snapping them up?!

That is one spooked investment community, if those reports are right, man.

I saw 3-month T-bills at 0.04% today. They are currently yielding 0.07%. The following is an update to this thread that I distributed to the community on my financial mailing list. Note the last paragraph.


The Treasury is using a new program (The Supplemental Financing Program ... Statement Regarding Supplementary Financing Program) to raise cash for the recently announced Fed initiatives. Originally I thought that the Fed may be buying these treasuries in an attempt to rebuild their treasury portfolio (which has been reduced to less than $500 billion due to its TSLF lending facility and the sterilization of various cash lending programs via treasury sales from its portfolio). The Treasury would then make the cash loans to the necessary parties. But it is being announced as the Treasury selling the treasuries in special treasury auctions (more government debt) and providing the proceeds to the Fed. This will be interesting to watch as it is explained more fully.

FT Alphaville » Blog Archive » The Fed's run out of money

It did not take long for the Treasury to put the program into action. The Treasury sold $40 billion of 35-day bills today (at 0.30% yield) for the Fed and will sell $60 billion worth of bills in two auctions tomorrow, for a two-day total of $100 billion. This is obviously inflationary and is a departure from the mostly neutral money supply policies it has been executing recently with the various lending programs to troubled financial institutions (due to sterilization). This decision is not surprising given the depletion of the Fed's portfolio this year.

In other significant related news today ... we had a flight to safety with Gold up nearly $90 (11.5%) and Silver up about $1.72 (15.5%). But perhaps the biggest news was the rush to three-month treasury bills and the incredible spread between what banks pay to borrow (LIBOR rate) and what the Treasury pays to borrow, collectively dubbed the TED spread. Three-month treasury bills were paying a mere 0.04% yield today as investors rushed out of various types of money market funds (fear of money market fund devaluation and frozen redemptions) as well as all manner of other investments. The spread between LIBOR and 3-month treasuries widened to 302 basis points ... higher than the 300 basis point spread that was registered on Black Monday 1987.

Brian

 

[gonegolfin]

With 3-month T bills yielding nothing and the Fed Funds rate at 2%, we are going to have problems. I smell another fed funds rate cut coming and soon.

I saw 3-month T-bills at 0.04% today. They are currently yielding 0.07%. The following is an update to this thread that I distributed to the community on my financial mailing list. Note the last paragraph.


The Treasury is using a new program (The Supplemental Financing Program ... Statement Regarding Supplementary Financing Program) to raise cash for the recently announced Fed initiatives. Originally I thought that the Fed may be buying these treasuries in an attempt to rebuild their treasury portfolio (which has been reduced to less than $500 billion due to its TSLF lending facility and the sterilization of various cash lending programs via treasury sales from its portfolio). The Treasury would then make the cash loans to the necessary parties. But it is being announced as the Treasury selling the treasuries in special treasury auctions (more government debt) and providing the proceeds to the Fed. This will be interesting to watch as it is explained more fully.

FT Alphaville » Blog Archive » The Fed's run out of money

It did not take long for the Treasury to put the program into action. The Treasury sold $40 billion of 35-day bills today (at 0.30% yield) for the Fed and will sell $60 billion worth of bills in two auctions tomorrow, for a two-day total of $100 billion. This is obviously inflationary and is a departure from the mostly neutral money supply policies it has been executing recently with the various lending programs to troubled financial institutions (due to sterilization). This decision is not surprising given the depletion of the Fed's portfolio this year.

In other significant related news today ... we had a flight to safety with Gold up nearly $90 (11.5%) and Silver up about $1.72 (15.5%). But perhaps the biggest news was the rush to three-month treasury bills and the incredible spread between what banks pay to borrow (LIBOR rate) and what the Treasury pays to borrow, collectively dubbed the TED spread. Three-month treasury bills were paying a mere 0.04% yield today as investors rushed out of various types of money market funds (fear of money market fund devaluation and frozen redemptions) as well as all manner of other investments. The spread between LIBOR and 3-month treasuries widened to 302 basis points ... higher than the 300 basis point spread that was registered on Black Monday 1987.

Brian

 

[BaronVonBigmeat]

All this going down, and silver went from $20 or whatever to $10.50. Granted it's up to $12 now, but still. Something smells fishy. It also seems that physical supply is running pretty thin.

 

[gonegolfin]

All this going down, and silver went from $20 or whatever to $10.50. Granted it's up to $12 now, but still. Something smells fishy. It also seems that physical supply is running pretty thin.

I think Butler is on the right track w/respect to the huge short position that was built up over a small period of time just recently when Silver plummeted from $19. That massive short position was accumulated by at most two and probably one big bank. I am nearly certain that one of those banks (if not the only one) is JP Morgan Chase. The same thing happened with Gold, although as many as three banks may be involved with the gold short positions in question.

Physical supply has been very tight. For quite some time, I (nor my friends and family) were able to find any quality silver bars, Silver Eagles, or Silver Maples. Now you can find limited supply, but the premium over the spot price is considerably larger than I have ever seen it in the past. Quantity discounts are not being given (as supply is precious). The cheapest premium over the spot price I have seen is $4.29 (Silver Eagles) from apmex.com. My local coin shop wants $23 per 2008 Silver Eagle. There is a complete mismatch between the paper price and physical price.

Fortunately, I have an account at goldmoney.com and was able to purchase 1000 oz. bars in allocated storage for just $0.45 over spot. 1000 oz. bars are not considered retail silver and are more available. This is what the COMEX stores and what the Silver Users (Silver Users Association) purchase for their industrial needs. I think that we may see a shortage here soon as well due to the artificially low price.

Brian

 

[BaronVonBigmeat]

Is there any way to move some of your 401k into precious metals without incurring all the penalties and whatnot? We have a choice of a few funds, but nothing that is explicitly commodities or metals.

Then again...even if I take out a loan and pay back 6% or whatever...I'm paying myself back. It's just that I've missed out on whatever gains the fund got during the term of the loan. Which...lately happens to be negative numbers, and will probably continue that way for a good while, heh.

 

[gonegolfin]

Is there any way to move some of your 401k into precious metals without incurring all the penalties and whatnot? We have a choice of a few funds, but nothing that is explicitly commodities or metals.

Then again...even if I take out a loan and pay back 6% or whatever...I'm paying myself back. It's just that I've missed out on whatever gains the fund got during the term of the loan. Which lately happens to be negative numbers, and will probably continue that way, lol.

Not physical metal ... I know of no 401K plans that allow for investment in physical metals. If you have a 401K brokerage account, you can invest in the Silver and Gold ETFs. But this is paper silver in my opinion. I use it for trading, but not long term core positions.

You can invest in precious metals using your IRA. There are various programs available. But if we ever had another confiscation by the government, these would be targets. I also do not like the costs in these programs.

My 401K at work is quite limited in choice (as are many 401Ks). So, I use this account to accumulate a substantial portion of my overall portfolio cash position. Unfortunately I cannot invest in a pure treasury money market fund in this account. It is invested in the Fidelity Prime Fund (your typical money market fund). I use my IRAs to invest in precious metals stocks, energy stocks, and foreign currency money markets.

My physical Gold and Silver holdings are spread among various non-retirement accounts. I also keep some US Dollar cash (Treasury money market funds only) and Foreign cash (money markets) in non-retirement accounts ... enough, combined with my 401K cash, to protect against a deflationary event. But most of the rest is positioned for inflation.

Brian

 

[Toro]

If you include all the loans given to nationalize companies, Bear Stearns, the alphabet soup of facilities to pry T-bonds off the Fed's balance sheet and the proposed $500 billion in RTC II, the government will have thrown over $1 trillion at the mortgage debacle.

 

[gonegolfin]

If you include all the loans given to nationalize companies, Bear Stearns, the alphabet soup of facilities to pry T-bonds off the Fed's balance sheet and the proposed $500 billion in RTC II, the government will have thrown over $1 trillion at the mortgage debacle.

Let's see here ...

TAF $200 billion
TSLF $200 billion (recently increased)
Money Market Fund guarantees $50 billion
Bear $29 billion (on Fed balance sheet)
Fannie/Freddie $200 billion (this is my estimate)
RTC II $500 billion (I think it will be much more)
Stimulus Package $150 billion
Treasury Supplemental Financing Program $200 billion (AIG is included here)
Net outstanding TOMOs $100 billion
PDCF and Other loans $100 billion

While some of this will eventually be repaid, this is a lot of monetary inflation to swallow over the next few years. I think we will throw at least $1.5 trillion at the problem in the end, maybe $2 trillion.

Brian

 

[Paulie]

Let's see here ...

TAF $200 billion
TSLF $200 billion (recently increased)
Money Market Fund guarantees $50 billion
Bear $29 billion (on Fed balance sheet)
Fannie/Freddie $200 billion (this is my estimate)
RTC II $500 billion (I think it will be much more)
Stimulus Package $150 billion
Treasury Supplemental Financing Program $200 billion (AIG is included here)
Net outstanding TOMOs $100 billion
PDCF and Other loans $100 billion

While some of this will eventually be repaid, this is a lot of monetary inflation to swallow over the next few years. I think we will throw at least $1.5 trillion at the problem in the end, maybe $2 trillion.

Brian

Brian do you think we've seen the absolute bottom in precious metals for a while?