Sunday, February 20, 2011

Retail Treasury Buyers

Treasury Direct: Auctions

Both TreasuryDirect and Legacy Treasury Direct allow noncompetitive bidding only.

We can use this information to get an idea what the individual retail investor is doing in the auctions by comparing noncompetitive bids to competitive bids.

In the chart that follows, I'm showing the results of the first auction in each year.

Click to enlarge.

Note that the typical individual retail treasury investor does not seem even remotely concerned about Japanese style deflation. There was concern in 2002 (as seen in nominal treasuries) but that concern has vanished. The "buy everything" mindset seems firmly established.

Also note that the typical individual retail TIPS investor apparently prefers to stampede into TIPS after the stock market crashes (both times). Who knew?

How to Close the Barn Door After the Horse Has Bolted

A panicked horse will do absolutely anything to escape.

The S&P 500 has doubled in the last 2 years. Copper recently hit a record high. Silver is trading at 4x its average inflation adjusted price (over the last century). Peak everything! What could possibly go wrong?

Source Data:
Treasury Direct: Announcement & Results Press Releases


Mr Slippery said...

"Silver is trading at 4x its average inflation adjusted price (over the last century)."

Silver price action this last week, and this evening is just stunning.

I've read that silver short positions are between 7=10 years of production, but I haven't confirmed that myself. Something big is going on there.

Commercial Signal Failure or tulip bubble? I don't know but this week will be fun to watch.

Disclosure: long physical and one silver miner. Go peak everything!

Stagflationary Mark said...

Mr Slippery,

Don't make me put up a silver to wheat price ratio chart!

Truth be known, I was going to do it anyway. ;)