``You do have to find buyers for the Treasuries that the Fed would have taken in the past. Bills, of course, have been torched by this.''

For every dollar the central bank adds to the banking system under the lending facilities, it withdraws a similar amount to maintain its target rate for overnight loans. The Fed bought bills at all but three of the 992 auctions from August 2001 to last December, according to the Treasury. By comparison, it didn't purchase bills at 30 of the 66 sales in the five months through April, and it won't buy any of those sold this week.

This is extremely bad with the government budget crisis going on. Look out for higher interest rates.

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