Wednesday, February 11, 2009
CNBC's Santelli expresses surprise over today's well received Treasury auction
I was just watching CNBC and they cut to "breaking news," which essentially was reporter Rick Santelli expressing surprise over today's better than expected auction of $20 billion in Treasury notes.
It's amazing to me how these people still don't understand that the government's own spending provides the funds to purchase government securities, which is why auctions will pretty much ALWAYS go off without a hitch.
The government spends first (resulting in an increase in reserves available to depository institutions) and collects taxes and sells securities later.