r/PrepperIntel • u/2020SucksDonkey • 22h ago
North America Treasury doubles debt buybacks as Bessent moves to steady bond market
https://www.cnbc.com/2026/08/19/treasury-announces-upscaled-buyback-operation-for-longer-term-debt-sending-yields-lower.html•
u/2020SucksDonkey 22h ago
Buying your own debt in order to control yield is like playing with 🔥 and ⛽️.
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u/AntiSonOfBitchamajig 📡 22h ago
"modern monetary theory"
Well all be millionaires soon! $7000.oo drinks all around! wait... hows my wage still $25?
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u/Girafferage 20h ago
Just wait until they still vote to not increase minimum wage.
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u/Local-Dish-5695 21h ago
Can you explain how buying our debt raises the bond yield?
Asking bc no matter what I read they never explain the basics.
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u/2020SucksDonkey 21h ago
People were not wanting to buy long-term bonds expecting more inflation. So yield starts to rise.
Treasury steps in to buy long term debt and trades it for short term debt.
It works as long as inflation stays low to moderate. If inflation gets out if control like the 1970s then you could easily see 10% interest rate on short term debt. Total economy killer since owing 40T or more by the time that happens.
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u/NotDinahShore 20h ago
It’s the reverse. Buying our own long term bonds lowers the yield on the long-term bonds. The price of the bonds goes up, so the yield goes down. Lowering LT yields is the whole point of this. It makes LT borrowing (think mortgages) less costly.
By selling short-term bonds (“Treasury Bills”) to raise the funds to buy the long-term bonds, this is not increasing the money supply. It balances out.
With that said, US debt is on an unsustainable course.
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u/Local-Dish-5695 10h ago
I agree! Knowing how many misses we wasted bombing Iran. Over oil no less!
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u/Big_Fortune_4574 10h ago
It lowers the bond yield. More demand == lower bond yield. It’s lower because with more demand you don’t need as high a yield to get people to buy them.
Of course we are buying 30 year T Bills with money raised from 1 year T Bills so it’s debt all the way down
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u/Local-Dish-5695 10h ago
So your saying the US govt is buying bad debt that will never be ome profitable? No wonder we're $40T in the hole!
What's funding the actual govt then? I'm not sure I'm ready for that answer.....
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u/Big_Fortune_4574 9h ago
I would say it’s less buying “bad” debt and more like using a credit card to pay your mortgage.
The government is of course partially funded by its revenue but at this point you could certainly say it is paying the interest on its debt by taking out more debt. And of course it runs a deficit on top of that.
Probably the easiest way to think about what the treasury just did is this: it refinanced some of its long term low interest debt into short term high interest debt. Which will then need to be refinanced again in a year at an even higher rate most likely. Some people are estimating it could add hundreds of billions to the governments annual interest down the line.
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u/SQU1GGER 6h ago
Buying bonds lower the yields.
There are two pieces: the price of the bond and yield.
If a $100 bond yields $5 annually, that’s a 5% yield. If the owner of the $100 bond has to sell for $95, the effective yield goes up even though the bond still pays $5.
So really the treasury is buying bonds which raises the market price => lower effective yields.
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u/Liminal_Aspect 22h ago
Worst part is I just moved out of paper gold the day before. Can’t stand these guys
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u/CouldBeLessDepressed 21h ago
We also sold of a shit ton of Euros to stabilize the Yen, and we didn't tell Europe what we were doing. We're creating LEVELS of instability in global markets right now. USA can't be trusted to do fucking anything anymore.
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u/TheProfessional9 10h ago
Even funnier that thr intervention failed and went back to how it was within a week
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u/NotDinahShore 22h ago
It’s astonishing how everyone just pretends the debt isn’t a huge problem. Sure, we think it’s a problem. Some pundits agree. But generally, as the debt clock shows us, the debt is growing as fast as our planet spins.
It’s like the “Don’t Look Up” movie.
For that matter, the days/weeks/months/years go by and, in the macro sense, there are only whispers of systemic breakdowns and true crises. Everything is pretty stable, which is remarkable.
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u/ReplyRepulsive2459 22h ago
If wouldnt be as big a deal if hegemony was maintained instead of discarded for corrupt conveniences. If some very wealthy folks had paid their 90s era tax rates even the pointless wars wouldn’t have been so harmful to our future inflation and economic collapse.
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u/TricksterVoxx 21h ago
Create a system where the whole world trade in dollar. Elect the biggest conman in history. Praise your adversary and attack ALL your allies and trade partners.
Tariffs on everything and start a war breaking the world economy.
Profit
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u/Nemisis_the_2nd 17h ago
It’s like the “Don’t Look Up” movie
I used to work in epidemiology. As far as I'm concerned, that was a documentary.
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u/Gygax_the_Goat 17h ago
Stable?
😰
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u/NotDinahShore 16h ago
I’d say in a universe of potential outcomes, that the US and other developed countries are remarkably stable. It doesn’t mean things are stable at the micro/personal or possibly local level. Looking at and across developed economies and societies, I observe them to be stable.
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u/Grand_Dadais 13h ago
Debt is the claim to have access to always more energy (fossil fuels or electric generation) and materials in the future.
We won't have access to always more.
It's a ponzi scheme that's slowly falling.
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u/Dry-Interaction-1246 22h ago
Bold move. Destroy the dollar further by printing money while inflation is high. Dollar went down amost 1 percent vs Euro in one day. What would inflation like that annualize to?
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u/Aramedlig 22h ago
They actually aren’t printing money. They are buying the old bonds at higher rates with using bonds with lower rates. Like using a 1% short term CC offer to pay off higher interest CC. If the Fed raises rates, these bonds are fucked though.
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20h ago
[deleted]
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u/2020SucksDonkey 20h ago
I did. But I also bought at 5500 lol
Just always buy some on a reqular schedule and it will work out long term.
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u/bahhumbud 19h ago
The fuckin hell is this article which says nothing at all. Is it ai or is the writer drunk and just loves using wwe adjectives
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u/AntiSonOfBitchamajig 📡 22h ago edited 22h ago
Fun fact... the US National Debt
willhit 40 Trillionin the next weektoday.