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Lots wrong with this. All Primary dealers are required to bid on all treasury auctions. https://www.newyorkfed.org/markets/primarydealers
Even if they weren’t, we can see via double entry bookkeeping that it *always* makes sense for banks to swap the reserves now sitting in one of their accounts (created when congress credited someone’s …
Lots wrong with this. All Primary dealers are required to bid on all treasury auctions.
https://www.newyorkfed.org/markets/primarydealers
Even if they weren’t, we can see via double entry bookkeeping that it *always* makes sense for banks to swap the reserves now sitting in one of their accounts (created when congress credited someone’s bank account for whatever it was buying) , for the interest-bearing treasury bond that treasury put out to “pay for” that spending.
http://www.profstevekeen.com/2020/09/06/one-mathematical-model-of-modern-monetary-operations/
The bond markets will never seize up or crash unless the fed willfully decides it wants them too. Just look at Japan, National debt pushing 240% of GDP and yet their central bank has had no problem using QQE with yield curve control to accomplish everything it wants to with the bond markets. (trying to hit inflation targets with monetary policy is a whole different can of worms though, obviously). This is just typical zero hedge trying to make money off of moving a market and trying to sideline the Biden Admin in the process.