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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Davy Crockett who wrote (8176)8/26/2007 7:32:44 PM
From: Hawkmoon   of 33421
 
Treasury bills are sold at an auction every second Tuesday through the Bank of Canada. They're bought by investment dealers, who then typically resell them to retail investors.

Mr. Mackenzie wants the central bank to help soothe the liquidity problems by issuing more bills.

Is Canada's manner in which government debt is created different than in the US? After all, I thought the Treasury, via authorization from the Legislature, issued public debt and the Federal Reserve (CB) held the auction on the government's behalf?

It goes back to the premise I presented earlier.. That the public debt markets are of insufficient size to handle a massive influx of private capital. And since the Federal Reserves primary means of injecting liquidity to private banks is by BUYING government debt from the private banks, this places the CB's and the private investment community in competition.

Hawk
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