Monday, 20 August 2012 17:36

Banks Use $1.77 Trillion to Double Treasury Purchases

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"The gap between U.S. bank deposits and loans is growing at the fastest pace in two years, providing lenders with more funds to buy bonds and temper the biggest sell-off in Treasuries since 2010.

As deposits increased 3.3 percent to $8.88 trillion in the two months ended July 31, business lending rose 0.7 percent to $7.11 trillion, Federal Reserve data show. The record gap of $1.77 trillion has expanded 15 percent since May, the biggest similar-period gain since July, 2010. Banks have already bought $136.4 billion in Treasury and government agency debt this year, more than double the $62.6 billion in all of 2011, pushing their holdings to an all-time high of $1.84 trillion."

Another indicator to me of the coming fall/winter crash. It helps explain how the economy can hang in "Whiley-Coyote" time a bit though. - Wes 

Bloomberg article

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