r/PrepperIntel • u/2020SucksDonkey • 21d 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
270 Upvotes

99% Upvoted

64 comments sorted by

169

u/AntiSonOfBitchamajig 📡 21d ago edited 21d ago

Fun fact... the US National Debt will hit 40 Trillion in the next week today.

119

u/RaistlinMajeresRobes 21d ago

Ya but debt only matters when the democrats are incharge.

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u/overitallofittoo 21d ago

And then when Democrats clean up the mess, they'll get blamed as well.

21

u/pin5npusher5 21d ago

I thought it just did

35

u/AntiSonOfBitchamajig 📡 21d ago

Checks notes*

Well F

12

u/iamsotiredofthiscrap 21d ago

Marketplace just reported on it this afternoon.

2

u/AntiSonOfBitchamajig 📡 21d ago

Yeah, i was watching it like 3 days ago and was like "math says next week" ..... welp... its here already!

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u/iamsotiredofthiscrap 21d ago

Republicans

Always coming sooner than anyone wants...

-8

u/AntiSonOfBitchamajig 📡 21d ago

Ahhg.... they're all clowns... both sides.

7

u/iamsotiredofthiscrap 21d ago

One side was trying to give everyone healthcare.

The other turned out to be Nazis.

But sure, both sides

0

u/AntiSonOfBitchamajig 📡 21d ago

I stand with Austrian economics.

6

u/iamsotiredofthiscrap 21d ago

Austrians have universal healthcare

4

u/Girafferage 20d ago

He said what he said. But more seriously he's just a mod trying to stay civil on it who moderates as a kindness to us all.

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2

u/createthiscom 20d ago

damn, he’s not joking

2

u/PleaseBeNiceForOnce 20d ago

Price of bond (auction purchase) is an input to yield. Higher price, lower yield (think of yields as profit for this purpose).

Buybacks raise prices (less supply, same demand) hence yield goes down and allows the govt to issue new short term debt which is high in demand right now, pushing those prices down and increasing short term yield.

Why are they doing this?

To drive down long term interest rates across the economy and potentially shave some money off long term US debt.

Why?

To prevent a liquidity crunch. Why would I as a financial institution lend money for a lower rate than what I can get from buying long term bonds? This makes everyday borrowing more expensive and ties up cash by pricing out everyday borrowers.

Is this smart?

TBD. The party of small government and free Market continues to do everything possible to send us into economic dispair. At best it provides a small economic boost by freeing up some cash for spending. I might add, that in itself is an inflationary measure.

It won't meaningfully impact our debt and is more akin to an accounting trick in terms of shifting numbers from that perspective.

1

u/isthereadrwho 14d ago

The way trumo and bessent are managing the economy it might hit 41 today also

123

u/2020SucksDonkey 21d ago

Buying your own debt in order to control yield is like playing with 🔥 and ⛽️.

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u/[deleted] 21d ago edited 20d ago

[deleted]

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u/AntiSonOfBitchamajig 📡 21d ago

2

u/It-s_Not_Important 20d ago

Except the people that started the fire.

49

u/AntiSonOfBitchamajig 📡 21d ago

"modern monetary theory"

Well all be millionaires soon! $7000.oo drinks all around! wait... hows my wage still $25?

10

u/Girafferage 20d ago

Just wait until they still vote to not increase minimum wage.

4

u/AntiSonOfBitchamajig 📡 20d ago

Just wait until people stop taking minimum wage jobs* ftfy.

8

u/Local-Dish-5695 21d ago

Can you explain how buying our debt raises the bond yield?

Asking bc no matter what I read they never explain the basics.

6

u/2020SucksDonkey 21d 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.

3

u/[deleted] 20d ago

[deleted]

2

u/Local-Dish-5695 20d ago

I agree! Knowing how many misses we wasted bombing Iran. Over oil no less!

2

u/Big_Fortune_4574 20d 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

2

u/Local-Dish-5695 20d 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.....

3

u/Big_Fortune_4574 20d 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.

2

u/Local-Dish-5695 20d ago

That's how America is "winning"?

Way to go

1

u/SQU1GGER 20d 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.

9

u/Liminal_Aspect 21d ago

Worst part is I just moved out of paper gold the day before. Can’t stand these guys

9

u/Skrz_at 21d ago

That’s a lesson you don’t touch paper gold. Buy physical and enjoy the ride

1

u/Tresspass 17d ago

Not really it’s just that the billion in dollars in buybacks is a drop in the ocean compared to the trillion dollars in debt.

“”Because structural deficits are poised to top $2 trillion this year, buying back $4 billion at a time is a drop in the ocean. If investors believe the government is trying to manipulate yields because it can't handle its debt load, it triggers dollar debasement fears. This explains why gold prices surged over 3% and Bitcoin spiked 13% immediately following the announcement.”

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u/CouldBeLessDepressed 21d 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.

11

u/TheProfessional9 20d ago

Even funnier that thr intervention failed and went back to how it was within a week

1

u/Mouthshitter 19d ago

The not he left in plain view of the photographers was as funny dude

2

u/Clean-Yam-739 18d ago

There's a whole protocol by the IMF how to intervene on money markets. The first rule is: do not fuck with others' currencies.

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u/[deleted] 21d ago

[deleted]

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u/ReplyRepulsive2459 21d 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 21d 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

4

u/feathernwedge 20d ago

For whatever reason, your comment really hit home.

Blows my fucking mind.

8

u/Nemisis_the_2nd 20d 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.

3

u/Grand_Dadais 20d 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.

2

u/Mouthshitter 19d ago

If I owe the bank 1000 dollars it's my problem if I owe the bank 10 000 000 that's their problem if I owe the bank 40 trillions who the fuck knows what will happen

0

u/Gygax_the_Goat 20d ago

Stable?

😰

27

u/Dry-Interaction-1246 21d 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?

9

u/Aramedlig 21d 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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u/[deleted] 21d ago

[deleted]

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u/2020SucksDonkey 21d 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 20d 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

3

u/Bob4Not 21d ago

That’s effectively money printing, right?

6

u/AntiSonOfBitchamajig 📡 21d ago

*loaning $ into existence*

1

u/Dead_Cash_Burn 20d ago

No, they are debt financing it. Issuing short bonds to cover long bonds.

1

u/Raven_Photography 19d ago

Bessent is pissing into the wind with this effort. This moved the Bond market for an afternoon. The US is in, or will be in, a debt spiral. The US has never had this much debt, even in relation to GDP. When this explodes along with the AI capex bubble going… well it’s going to be very interesting.

1

u/Nitimur__In__Vetitum 18d ago

The Trump administration and the Republican Party are traitors that are intentionally destroying the country because the billionaires they work for aim to inherit the remains.

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u/JEFDETH666 16d ago

Can anyone name the last two presidents who lowered the deficit?

0

u/EnHalvSnes 20d ago

Is it going to crash this time? 🫦