The Road to a US Insolvency Crisis
Today's auction of 10- and 30-year US Treasury notes and bonds won't tell us as much about the US economy as auctions used to -- because the Federal Reserve has started buying up the notes as part of Fed Chairman Ben Bernanke's "quantitative easing" effort.
Until recently, a plentitude of bidders for long-term US government debt was a sign the US economy was strong. But Bernanke is buying that debt in what he says is an effort to make the economy stronger.
This has a lot of people nervous -- and the news that the Fed may spend up to $800 billion on this, rather than the $600 billion figure initially given, doesn't help. Full article