Fed Buys 90% of New Bonds ISSUED

FROM GOLDSILVER.COM

  Treasury scarcity to grow!

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Bloomberg

The government will reduce net sales by $250 billion from the $1.2 trillion of bills, notes and bonds issued in fiscal 2012 ended Sept. 30, a survey of 18 primary dealers found. At the same time, the Fed, in its efforts to boost growth, will add about $45 billion of Treasuries a month to the $40 billion in mortgage debt it’s purchasing, effectively absorbing about 90 percent of net new dollar-denominated fixed-income assets, according to JPMorgan Chase & Co.                                                                                                                                                   Buyers range from central banks to financial institutions stocking up on high-quality assets to meet the Dodd-Frank financial-overhaul law and global regulations set by the Bank for International Settlements. They’re helping the Fed and the Obama administration keep borrowing costs at all-time lows for everyone from consumers to Walt Disney Co.                                                                                                                                                                                             Deposits at U.S. banks exceed loans by $1.91 trillion, marking a turnaround from 2008, when loans exceeded deposits by about $200 billion. Much of that surplus money has been used to buy Treasuries and government agency debt such as that issued by Fannie Mae, Freddie Mac, boosting holdings to a record $1.86 trillion, Fed data show. Bank holdings of Treasuries increased 15 percent to $531.7 billion in the past year.