Category / Federal Reserve

by Hoosier Econ

Pork Prices To Rise

Purdue Agricultural economnist Chris Hurt is projecting pork prices to head this summer into the mid $90 per head profit range for producers. Currently they sit around $70 per head. Excluding inflation from money printing, he states that smaller spring farrows from PEDv virus and growing foreign purchase of US pork is driving the pricing. Hurt has suggested farmers has seen this price indicator and plan to expand their pork farrows between 4-6%. His analysis also leads to lower pricing after September of this year after the $90/head profit is reached. Spring of 2015 bigger herd numbers should be seen.

by Hoosier Econ

IPO Market

18 new IPO’s hitting stock market this week. I invest off money supply movement and IPO’s are one of many indicators to watch in regards to movement of money into the system. What is noteworthy of this amount hitting in one week, it has hasn’t happened since the year 2000.

Year to date, 136 IPO’s have come to market which is a 64% increase from the previous year. Money printing is taking hold.

by Hoosier Econ

US Federal Government Interest on Debt Payments

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After August, Congress (House/Senate) will convene and raising the debt ceiling will once again be a hot topic. The US Federal Government has not passed a Constitutional required budget in almost six years. In America’s new age economics of moral relativism, spending at any level is o.k. You can get mad at it all you want if you don’t fall into this thinking, but you might as well make a lot of money and/or save your wealth while the masses cheer on this debt driven philosophy.

The Treasury Department just released their “Interest on Debt” payments for the month of July. They paid out $25 Billion in just one month. There are two fiscal months left but so far the US Government has paid out $370 Billion in payments. Most of these payments go to the Federal Reserve and foreign countries.

Here is the federal government link showing how much we have paid out for numerous years. The word “Trillion” pops up real quick when you just start adding up just a small portion of years.

These stats are good to know when thinking about your investments.

by Hoosier Econ

Government Sells Debt This Week….Here’s How It Went

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The United States Treasury sold quite a bit of debt this week and here is the round up of how it went. Quick note: 10 Year Treasuries have been spiking lately suggesting that investors are now demanding the government pay more on their interest on debt. July 2012 it was 1.38%. It now stands at 2.17%. 

– On Thursday, $29 Billion was sold in 7 year notes at a yield of 1.496%. This is the highest since March 2012. Almost 40% of the debt was bought up by indirect bidders which include foreign central banks. Another 20% was bought up by direct bidders which is money managers. 

– On Wednesday, the Treasury sold $35 Billion in five year notes. Indirect/Direct buyers accounted for 67% of the purchases because interest rate was higher. Bidders got 1.045% which is the highest since October 2011.

-On Tuesday, the government ran into some problems with their 2 year notes. They sold a total of $35 Billion in debt to mostly primary dealers. Indirect/Direct only accounted for 33% of the buying. This was the fewest bids for two year notes since February 2011.

Overall the government sold $99 Billion in debt. Obviously this has to be paid back in 2-7 years with either more tax revenue(which means tax increases) and/or new bond sales. Interest rates appear to be going up by investors wanting more comfort since government has so much debt and with other investments paying higher percentage of return. The government has to play just like everyone else seeking investors to buy their debt.

May “Interest on Debt” payments have not been released yet. But so far in the fiscal year 2013 (which began in October 2012), United States Treasury has paid around $228 Billion on interest on debt. You can track the interest on debt yourself at this site