Relevant:
- Fed Buying Less at Treasury Auctions Thanks to New Facilities
- U.S. Treasury Plans Floating-Rate Notes in Year or More
- US misprinted 30 mln new $100 bills; Release Delayed Again
- US Treasury Rolls $284 Billion In Bills, $316 Billion In Total Debt In First 10 Days Of June, Cash Balance Down To $4 Billion
- Treasury 'Scarcity' to Grow as Fed Buys 90% of New Bonds
2012-12-23 — yahoo.com
"That's substantially higher than the run-rate of the past couple of years," Colas points out, and 50% more than the 2 billion $1 bills that were inked up. "It's actually a record amount of production," he says.
All of which begs the question, why?
This is pretty interesting in that the Fed has otherwise been pretty successful in keeping "cash from hitting the streets" in its deflation-fighting. However, a glaring consequence of Treasuries yielding nothing is that there's no reason to hold them instead of cold, hard cash. In fact, they aren't subject to interest rate risk at all (and to a lesser extent, default risk), so for wealth-preservation, $100 bills make more sense than Treasury notes today.
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