"Who, in their sound mind, would be buying UST with carrying a negative return?"
Subject has been threshed about lately. For ex. BOE buys on behalf of FED. It's all virtual now.
here's more from Willie;
My trusted colleague CraigM is loaded with insight, sound judgment, and tireless spirit. He shared his view of the end pathway, saying "It would seem to me the most probable way for a default would be via a collapse of the USDollar. My logic is as follows [in a sequence cycle]: 1) As long as the Fed has the printing press, it will continue to print and will monetize all USTreasury debt either directly or covertly. 2) The Fed & USTreasury will control interest rates via Interest Rate Swaps. 3) As the Chinese and others sell their USTreasury holdings like they are doing now, the Fed will buy them via the printing press. 4) This cycle will continue as the Fed continues to print endless Federal Reserve Notes and will only stop when the USDollar becomes worthless."
=====================and ... (I highlighted the last statement - think about it)
◄$$$ THE USTREASURY DEFAULT LIES DIRECTLY AHEAD, BUT WHOSE TIMING IS UNCLEAR AND UNKNOWN. THE POWER STRUCTURE ASSURES IT. THOSE IN CONTROL ARE BANKRUPT. THEY WILL NOT GIVE ORDERS FOR THEIR OWN REMOVAL OR RUIN. $$$
Some basic questions yearn to be hurled onto stage. A year ago, the Hat Trick Letter elaborated the USFed insolvency and prospects to worsen. My theory and forecast of a USFed resignation seems more likely and acceptable with the coming arrival of QE2 and its next heavy monetization. The USFed balance sheet will be loaded with more toxic garbage assets tied to mortgages. The buyer of last resort is choking to death in a toxic sea of bad debts, the charred ruins of busted bubbles. So ponder these questions:
- Why does nobody talk about how the USFed has gone insolvent ?
- Why does nobody talk about how the USFed's toxic balance sheet has gone worse ?
- Why does nobody talk about how the USFed assets will not be restored in value ?
- Why does nobody talk about how the USFed is busted and will surely quit ?
- Why does everybody assume the USFed has an unlimited tolerance to lose money ?
- Why does everybody assume the USFed is benevolent toward the United States ?