The next bubble to pop?

You must recall, me saying on more than one occasion that I believed U.S. Treasuries were the next bubble to pop... If you're with me on that, then let's talk about something that might cause that bubble to pop... Ahhh...

Here we go! We have 3 separate auctions going on this week with a total of $92 Billion of Treasuries on the selling blocks...
We start with an astronomical $63 Billion of 3-year notes, followed the next day by $18 Billion of 10-year Notes, and finally $11 Billion of 30-year bonds...

Now... Let's circle back to the financing of our deficit...
Recall that many times I've explained how The deficit needs to be financed by foreigner purchases... And when those foreigner purchases aren't enough to finance the deficit, the Gov't only has two choices...
They can raise interest rates aggressively in an attempt to attract foreign investment... (but by doing so, would bring their economy to their knees) -OR- The Gov't can allow / force a debasement of their currency, a general weakening if you will, to allow those purchases to be made at a "discount".

For you see, any foreign investment into Treasuries, has to be made with dollars, so the foreigner needs to convert their currency for dollars... If those dollars are at a "discount" then the foreign investors gets the bargain!

So... Here we go with the big crescendo... The fears late yesterday and in the overnight markets is that these auctions carry notes and bonds with yields that just aren't of the making to attract enough investment interest to be covered... Well... If the auction doesn't go well, that means we have a financing problem, and with our economy in the shape it's in, there's no ability to aggressively raise interest rates... So... the only choice is to have a weaker dollar! And here's where I get to mock those that believed that "deficits don't matter"... They all come home to roost eventually folks...