[quote=The OC Scam]I was concerned before about the treasury being able to sell bonds to the already over sold world.[/quote]
So far not a problem at all. Matter of fact, demand for treasuries is so high that rates on them are at record lows. Of course this could change in the future, but so far not a problem.
[quote=The OC Scam]I have recently been reading about the failures to deliver UStreasurys to be a precursor to a actual default and that maybe we are seeing a redux of counterfeit issuance of USTBonds in order to satisfy unprecedented demand. [/quote]
I’m not an expert on these kinds of trades but I think the failures to deliver are when banks do swaps or naked shorts, and then fail to deliver them on time. In virtually all cases they ultimately get settled. I do NOT believe that these are cases of the US Treasury failing to deliver. (And why would the treasury fail to deliver? They got plenty of debt to hand out.) I think what this graph shows is that in the last several months there has been a lot of stress on the banking system. But we already know that, so that’s not news. I do NOT believe this is at all indicative of coming default by the US Treasury.
As to counterfeit treasuries, I don’t think that’s a real threat or problem. Of course there is always the potential for scams, (as the recent Madoff incident clearly reminds us) but I doubt the world economy is threatened because of counterfeit treasuries. (Not say that there aren’t other very real threats though)
