http://www.marketoracle.co.uk/Article12573.htmlThe USTreasury auctions continue to proceed successfully, and thus finance the USGovt deficits through bond issuance. The auctions have continued, but their schedule is very frightening since the volume for given days and weeks equals what was once volume for an entire month one year ago. The press networks tell of successful funding for the bonds, even though additional needs are required to keep the stock market afloat. Two deceptions here occur. First, by means of USDollar Swap Facilities, the USDept Treasury is handing money to friendly foreign central banks in order to purchase USTreasurys in hidden or custodial accounts, all indirect bidders. Without them, the auctions would fail miserably. Second, the bid-to-cover ratio is reported in a manner that includes the official primary bond dealers. They, however, are obligated to bid on all auctions. So the 1.92 bid/cover seen last week was an actual failure, since only 92% of bids occurred outside the primary dealers who hustle to unload their inventory. More double counting comes, now that Toronto Dominion and Royal Bank (both of Canada) as well as Nomura (of Japan) join the primary bond dealer ranks. This road leads to staggering hidden monetization of USTreasurys and outright auction failures, BOTH, with severe damage done to the USDollar confidence and reputation.
US Treasury auctions are a means for the US government to raise funds by selling securities, such as Treasury bills, notes, and bonds, to investors. These securities are essentially IOUs from the government, with a promise to pay back the principal amount plus interest at a future date.
US Treasury auctions are typically held on a regular schedule, with varying frequencies depending on the type of security being auctioned. Treasury bills are auctioned weekly, while Treasury notes are auctioned monthly, and Treasury bonds are auctioned quarterly.
US Treasury auctions are open to both individual and institutional investors, including banks, mutual funds, and foreign governments. However, there are certain restrictions for foreign investors, and individuals must set up an account with a financial institution to participate.
The success of a US Treasury auction is an indicator of investor confidence in the US economy and government. If there is high demand for the securities being auctioned, it can be seen as a positive sign for the economy. Additionally, the interest rates at which these securities are sold can also impact borrowing costs for the government and other businesses.
The success of a US Treasury auction can be influenced by various factors, such as economic conditions, interest rates, and global events. For example, if the economy is strong and interest rates are low, there may be higher demand for Treasury securities. On the other hand, if there is uncertainty or instability in the market, investors may be less likely to bid on these securities.