Daily Treasury Statement Charts Update: 25/4/11
An update of the daily treasury statement charts for 25/4/11:
The total operating balance of the US Treasury rose by around $1 billion on Friday (latest). As I wrote in one of my previous updates, the US Treasury is currently in the process of unwinding its MBS portfolio. Although nothing was deposited relating to this on Friday, $8.5 billion has been received from the proceeds of MBS sales this month so far.
Markets have staged a recovery – the major equity indices have either taken out or are testing their February and April highs. Moreover, silver and gold have been soaring higher. After the recent rise in the US Treasury’s total operating balance, the lagged daily treasury statement charts (below) suggest that an uptrend could remain in force for 6-7 weeks. As always, I warn that this interpretation could be deemed to be alchemistic in nature. Even if past correlations continue for some time, we should note that this run might be a ‘final move’. For those just stumbling onto this site: The broad thesis is that net government spending is bullish for asset prices (on a lagged basis) and net accumulations of cash are bearish for asset prices (on a lagged basis). For a more detailed interpretation of these charts see here.
Recommended: Charting the Federal Reserve's Assets - 1915 to 2012