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  • From: Marjory <forestgarden@gvtc.com>
  • To: austin perm <austinperm@yahoogroups.com>, permaculture <permaculture@lists.ibiblio.org>
  • Subject: [permaculture] US Debt - this is really disturbing
  • Date: Thu, 14 Apr 2011 07:52:06 -0500

As you might already know, most foreign investors are no longer buying US debt, and it is primarily the Federal Reserve supporting the dollar now. I didn't realize that the Fed was going to end its bond purchases in June (see below). No wonder Bill Gross is actively *shorting* the treasuries... The rich make money in good markets and bad.
If the Fed stops buying treasuries what will the US Gov't use to pay? They will strip Gov't retirement funds for sure, and whatever is left in social security, but just how many days or weeks after that will the US Gov't start to default on its debt? That is definitely the beginning of TEOTWAWKI.

June also looks like it is going to be a really rough month for the stock market as the earnings reports are going to very bad for all those companies affected by lack of Japanese parts.

Buckle up.

*Marjory


*


PIMCO goes short US government debt, raises cash holdings

SINGAPORE, April 11 | Mon Apr 11, 2011 2:51am EDT

SINGAPORE, April 11 (Reuters) - PIMCO has shifted to a short position in U.S. government-related debt in the world's largest bond fund, while also raising cash holdings in a sign of the asset manager's serious concerns about the U.S. fiscal outlook.

The portion of PIMCO's $236 billion Total Return Fund held in U.S. government debt, including U.S. Treasuries, was -3 percent of total assets in the fund as of March, down from zero in February, the firm's website showed.

Cash equivalents, securities with maturities of less than a year, rose to 31 percent of the fund's assets compared with 24 percent in February.

* PIMCO and its outspoken co-chief investment officer Bill Gross have been raising alarm this year about who will support Treasuries once the Federal Reserve ends its bond purchase program as scheduled in June.*

The Newport, California-based fund manager shed all its U.S. government-related debt holdings earlier this year and has begun to wager against the asset class.

Washington narrowly averted a government shutdown on Saturday after Democrats and Republicans agreed on cutting $38 billion in spending for the fiscal year. [ID:nN09197615]

The 11th hour compromise probably had little impact on the investment strategies of Gross, who said in an April newsletter that the U.S. government was "out-Greeking the Greeks."

The entire U.S. yield curve has moved higher since the Fed began its second quantitative easing program in November 2010. Yields on 10-year notes have risen 80 basis points since then to 3.59 percent. (Reporting by Kevin Plumberg <http://blogs.reuters.com/search/journalist.php?edition=us&n=kevin.plumberg&;>)




  • [permaculture] US Debt - this is really disturbing, Marjory, 04/14/2011

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