U.S. Treasuries: The Big Dump Begins

There are two, major elements to the news that there is currently a global sell-off of U.S. Treasuries underway. The first element is obviously the news, itself. It becomes much harder for the U.S. government, the Federal Reserve, and the Corporate media to pretend that U.S. Treasuries are an asset of unparalleled “safety” (and supposed high demand) when nobody wants them.

The second, and equally significant aspect of this major development is the market “reaction” to this sell-off. What happens in any legitimate market, for any asset-class, when that asset is dumped onto the market? The price falls. But first, more specifics — direct from CNN.

Countries around the world are selling their U.S. government debt holdings this year by the largest amounts seen since at least 2000.

China has been selling U.S. debt but it’s not alone. Lots of emerging market nations like Brazil, India and Mexico are also selling U.S. Treasuries. Not that long ago all these countries were huge buyers of U.S. debt, which is viewed as one of the safest places to park money…

Foreign governments have sold more bonds than they have bought for ten consecutive months through July 2015, the most recent month of available data from the Treasury Department.  [emphasis mine]

If the global community were net-sellers of U.S. debt for one or two months, that could be characterized as a “blip”. If it happened for a few months in a row, perhaps it could be dismissed as an “aberration”. But when something happens in a market for ten, consecutive months, this is universally considered to be a trend.

What is the only, possible outcome in any market where there is at least a ten-month trend of dumping? What happens every time the bankers dump their “gold” and “silver” (i.e. paper-called-gold and paper-called-silver) onto the market? The price falls. Yet when we look at how U.S. Treasuries prices have tracked this year, we see the following:

1 month  –  virtually unchanged

3 month  –  virtually unchanged

6 month  –  increased

1 year  –  increased

2 year  –  increased

3 year  –  increased

5 year  –  increased

7 year  –  increased

10 year  –  increased

20 year  –  decreased

30 year  –  decreased

In any legitimate market; the price would have had to fall, for all categories of this debt. In legitimate trading; no one ignores a trend for (at least) ten consecutive months. Yet in this fraud market; we see two bond prices unchanged, and seven have actually risen. Only the rates for the two longest terms, the 20-year and 30-year bonds, did what all these prices must do…if this was a legitimate market.