Treasury needs to borrow $460 Billion immediately

[Zoomie1980]

In the next quarter. The problem, there is no one available to borrow it from. This is to actually pay for TARP. Without the Chinese, we are kind of stuck, badly. For the first time in American history we may float bonds, a significant number that WILL NOT SELL!!!

And we haven't even got this 1 Trillion dollar porkulus bill approved yet. If Treasury cannot get a loan to pay for the last stimulus (TARP) how the hell does anyone expect anyone is going to step up and loan us a trillion with the Chinese largely off the market now????

 

[Kevin_Kennedy]

Well they will probably print it. Though I wish they'd significantly raise taxes in an attempt to fund nonsense like TARP or this "stimulus" that way the people know exactly what they're dealing with and hopefully rise up in opposition to the government's complete waste of their money.

 

[Paulie]

Well they will probably print it. Though I wish they'd significantly raise taxes in an attempt to fund nonsense like TARP or this "stimulus" that way the people know exactly what they're dealing with and hopefully rise up in opposition to the government's complete waste of their money.

This is precisely why they WON'T tax it out of us.

 

[gonegolfin]

Well they will probably print it. Though I wish they'd significantly raise taxes in an attempt to fund nonsense like TARP or this "stimulus" that way the people know exactly what they're dealing with and hopefully rise up in opposition to the government's complete waste of their money.

The Fed has no authority to lend directly to the Treasury. When the government needs money, its only option is to sell treasury debt. Now, the Fed can support these treasury sales (auctions) by purchasing other treasury debt in the open market. But it cannot participate in Treasury auctions nor can it lend directly to the Treasury (outside of auction).

The Chinese continue to increase their treasury holdings. But the Asian countries do not have enough reserves (plus current levels of trade surplus) to bridge the gap. Domestic savers will need to step up. Either treasury yields go considerably higher (and they have increased dramatically in the last month) or the Fed steps in to help by monetizing debt.

Brian

 

[gonegolfin]

In the next quarter. The problem, there is no one available to borrow it from. This is to actually pay for TARP. Without the Chinese, we are kind of stuck, badly. For the first time in American history we may float bonds, a significant number that WILL NOT SELL!!!

And we haven't even got this 1 Trillion dollar porkulus bill approved yet. If Treasury cannot get a loan to pay for the last stimulus (TARP) how the hell does anyone expect anyone is going to step up and loan us a trillion with the Chinese largely off the market now????

The Chinese are not "off the market". They are buying more treasuries than they ever have. They simply do not have enough foreign reserves they must invest to provide the investment supply to the Treasury.

Brian