Is demand for U.S. government debt waning?
The latest Treasury auctions suggest that investors do not possess much of an appetite for American bonds.
First, the three-year note saw the yield come in higher than expected. But the real story was that primary dealers, which are financial institutions that buy supply that is not purchased by investors, scooped up around 26 percent of the issued bonds.
Second, the ten-year bond produced a higher-than-expected yield. And, once again, primary dealers bought around 16 percent of the supply.
The average that primary dealers bought over the last 12 months has been about 12 percent.
According to Apollo, the Treasury Department is expected to issue 23 percent more bonds in 2024 than in 2023, making it harder to find buyers.
It does not matter if no one purchases government debt. The FED has said that they will be the lender of last resort and purchase government debt when needed. This allows the politicians the ability to keep this debt economy chugging along, before this Ponzi scheme collapses.